Trader’s diary. Why and for what you need it?

Are you determined to succeed in trading? If yes, then before you start your journey as a trader, you need to have a transaction log (so-called trader’s diary), in where you need to regularly include a statistics for all deals. 

Trading statistics is a key element in the initial phase of trading. Keeping statistics of transactions, by itself, is the only way the concept of yourself as a trader, identify own mistakes and miscalculations, as well as prevent their further occurrence…

If you haven’t started a trader’s diary while trading binary options, it is likely you simply don’t realize how valuable and useful it can be for your success. All professional traders share one common thing – they are successful keep their own trader’s diaries. Therefore, if you are still losing on the deal, then you should think about your own trader’s diary!

Why you need a trader’s diary

– What? Trader’s diary? Hah-ha-ha – how it is funny! Why do I need to start keeping it? I am fully confident that can always keep all in my mind! Why should I waste my own time on it, if I can remind myself everything?!

Nostalgically, the word “diary” reminds all of us about our school years. That is why we associate it with something unserious. In most cases, except the banal trader laziness, such kind of a perception will negatively affect on trading. But in the professional world of trading “trader’s diary” is a statistical document, which consists of trading statements. As a result of long time of trading, it accumulates information for further analysis. The conducted analysis allows to properly manage the risk of loss of investment, that is, to increase the level of profitability of the trading strategy.

So let’s be honest, over some time you will start to forget some really important details. It is natural that time dulls our memory, from this we can clearly remember the gist, but not the valuable nuances. Taking notes in the diary about every held transaction, you will be able to monitor your progress and compare past decisions and results with present.

Important conditions of keeping the trader’s diary

… Start and keep your own diary from the first days of opening a trading account with a chosen broker.

… Include in your diary note about your own trading strategy, rules of entry/exit in /from the deal. Additionally identify and designate: number of transactions per day/month, allowable level of risk on a single trade. It is important to mention the indicators and add screenshots of each trade with the notes (ideally with descriptions).

… It is recommended to keep a records about the emotion you have experienced before, during and after single trade. Write down directly about what you have felt at that moment, was it fear, anger, joy, excitement… Your psychological state is extremely important!

… Systematically try to sum up all results on weekend or on monthly basis. Specify: the number of transactions with positive and negative results; the most profitable/unprofitable assets (e.g. currency pairs); timeframes and expirity periods with best results. Also, include your own analysis of screenshots and cast away the false signals.

… Include the goals. Every time you reread your trader’s diary notes, you will automatically remember yourself something you are aspiring. Also, you will clearly understand the reasons of your stops and failures on the way to the desired.

So how to do it? For traders who keep the diaries doesn’t matter actually how to do it. You can start even making handwritten notes. Nope, it’s not too late to use the trader’s diary, because starting making notes is possible at any time. As practice shows, even an experienced traders often ignore this, regularly pull the time for capturing important information.

Please remember, that you always need to write down a complete information in the report about the operations. Hence, you need to note the key characteristics of each every trade (in addition to basic, such as date of trade, price, option type, result, etc., the you have individually determine what parameters will be included in your trader’s diary).

Regarding reviews, it is not worth too much bother and try to economically correct describe your thoughts, do it briefly by using understandable for you words about the reasons for starting deal and its result. In the end, each trader’s diary will be like a detailed report of the trade on the exchange. Also good to make briefly a further notes about your daily trading plan at the very beginning of the day. There also should be specified the possible price of support/resistance levels. As a result, the diary itself will be showing you is it possible to stick to scheduled trading rules and plan as a whole or not.

Taking into account all previously said, it is important to mention next:

» be sure to note all the necessary information about deal, immediately after its close;

» you should not hold back and falsificate even the smallest details, because you are the only one who are using this, and it’s in your best interest to have at hand truthful statistics;

» use electronic diaries – they are the perfect way to process the statistics and save time.

Don’t be lazy and monitor every trade! All this will allow you to improve your own trading strategy and achieve the desired results. Analyze your diary at the end of the day and at the end of the week/month. Write down all results and make notes in end of each held trade. In the process of trading statistics collection you need to analyze:

»  the percentage of trades closed with profit and loss;

» estimate the strength of given arguments about the appropriateness of starting each deal;

» try to trace the patterns of time orders and time peaks of profitable trading.

Start to keep a trader’s diary or not is a purely your personal choice. All depends on the desires and goals that you follow. Perhaps you strive to winning real progress and achieve the way a professional trader or you simply comfortable with staying at same level with what is already gained.

It’s only up to you!

If there is real desire, then try for the beginning use a demo account from IQ Option, where you can also successfully start your trader’s diary and try your hand!

OPEN DEMO ACCOUNT

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”