You may have heard about the risks in This isn’t something intended to scare you. It is actually possible to wipe your trading account just by a few trades. In this case, you need to tune up your trading strategy, point out the right entry and exit point and improve your overall trading performance. But how should you do this?
One of the best ways to improve your chances of profits in trading is through a trading journal. This one important thing is the reason behind some of the most successful trades in CFDs. Regular entries to a trading journal will let you see recurring patterns that contribute to your losses as well as the trading moves you did to obtain success and profits.
The Trading Journal
Basically, a trading journal is like your diary in trading. It has all the information on your trades, each one representing a trade that you have taken. With a trading journal, you will obtain a clear view of your past trades and the markets you have traded with. Additionally, it has information about your entry and exit prices, the position sizes, the trade direction, and trade results. One of the characteristics of a trading plan aside from trading strategy and risk management is a trading journal.
Importance of Keeping a Trading Journal
One of the major contributions of a trading journal is its ability to provide important insights into the performance of the trader. When you keep a trading journal, you are able to analyze your past trade results which will somehow help you identify the reasons behind every action you did in your trade. If you are eager to succeed in trading, you must find some time to create a trading journal. It will be very helpful in the long run.
Things To Include in Your Trading Journal
There are certain things that need to be included in a trading journal. The main elements of a trading journal are the date and time of the trade, the instrument used in trading, the direction of the trade, the position size, the entry, and exit prices, and the results of the trade after it was closed.
Date and Time – A good CFD trading journal wouldn’t be accurate without the input of the date and time that the trade was made. There are traders who utilize Excel spreadsheet as their trading journal since it is easier to input date and time there.
Instrument Used To Trade – What financial instrument did you use during the trade. Name the financial instrument that you’ve used on the trade. If possible, you can include that market as well.
The direction of the Trade – Is it a buy or sell position? Determining the trade direction is an important aspect of your trade. Therefore, it is necessary to include the details in your trading journal.
Entry and Exit Points – Prepare three separate fields for this. It is intended for the entry price, take-profit level, and stop-loss level.
Position Size – For you to know if the position size that you took meets the risk management rules that you’ve set, it is important to note these details in your trading journal.
The Overall Result of the Trade – Is your trade successful or not? No matter the result of the trade, you should still input this detail into your trading journal.
