Why You Must Start Keeping A Day Trading Journal

Keeping a regular trading journal of the trades you make is of vital importance to your success as a profitable intraday trader. The fact that recent statistics indicate that over 97% of new day traders fail to even break even implies that in order to become successful, one needs to do something differently to the crowd. I would argue that the 3% who do eventually become profitable day traders get to this stage because they meticulously analyze both their winning trades and losing trades. And the way in which they do is? Keeping a trading journal.

Benefits Of Keeping A Trading Journal

So what exactly is it about a trading journal which can improve your performance? The answer comes in two parts.

Firstly, discipline. This is a crucial skill for any day trader to develop. The best traders in the world have a system – a specific strategy which they intimately know inside and out. This self developed trading strategy gives them guidelines for both entry and exit points for certain positions. Whether one is trading on stochastics, moving averages or a mixture of the two, a strategy is needed to help set boundaries for the trader.

However keeping within those boundaries takes discipline. Thus a great way to develop the skill of discipline is to keep a day trading journal. The act of setting aside a set amount of time a day devoted to keeping track of what you are actually trading, greatly enhances a traders discipline.

Secondly, and perhaps more obviously, by keeping a trading journal, it gives you the opportunity to analyze how you trade – or more specifically, it allows you to examine both your winning and losing trades.

Lets take an example – imagine you are stressed out day trader who cannot seem to take any profitable trades. You enter at exactly the wrong point, and you seem to exit your positions just as the stock turns around. Clearly this isn’t a good situation to be in – but its happened to all of us. By keeping a journal of all your trades, after the trading day has completed, you can go back and examine exactly why you decided to take the trade. By analyzing your trades you can then refine your strategy and turn your trading endeavors into a huge success. At the end of the day, get a large coffee, sit back in your favorite all black converse sneakers and read over your days activities.

But let this not be solely for the unprofitable trader. The most successful traders also keep trading journals so that they can analyze what they are doing right. This allows them to refine their strategy even more.

In conclusion, I truly believe that keeping a day trading journal is the single most important thing a trader can do. If you do this, you will become profitable very quickly.

About the Author

Jimmy is a professional intraday trader, and has been trading independently for the past 10 years now. He also runs seminars to help other new traders become profitable. In his spare time, he runs a website about his favorite all black converse sneakers.