Why Do You Need A Forex Trading Diary

We live in a period where changes occur every minute. This happens everywhere, including in the Forex market. Prices and conditions are always changing and it’s not easy to keep focus on the big picture, which is essential for you to succeed. So, what should you do?

There is one thing that can help you focus better. Some people call it a trade log but I prefer to call it a trading diary. The main idea behind is to write down all your reasons for entering and exiting a trade, what you feel before, during and after the trade was executed, if you followed all the rules of your system and if you didn’t, why. It’s better to write more than less. Pay attention to all details, to every reaction you have…

Without this notes, most probably you’ll repeat the same mistakes and continue to lose money, which is time consuming and frustrating. Without a trading diary, you won’t remember exactly why you acted in the way you did, and what you were feeling at that time. By keeping a record you are able to identify patterns of trading behavior you need to correct.

Yes, this takes time and work. But in the long run, it will cut down your learning curve. And now, thanks to technology, you don’t even have to do it by hand and write down in a piece of paper.
One of the most convenient ways of keeping a trading diary is to use your own computer. Use a Microsoft word or excel document or any other application of your choice. These applications are easy to edit, read and review. But this isn’t your only option. You can use a tape recorder too. If you don’t like to write, by hand or in the computer, just grab a tape recorder.

Including screen shots of the charts is always helpful (remember that more is better than less…). And now, there are a lot of free software that allow you to do this. You can even edit the image by placing your notes there or print it off and write the notes by hand.

The point in having a trading diary is to look at it and read it from time to time. Take some time of your schedule to do this. There’s no point in having a trading diary if you won’t read it in the future. Read it carefully and try to see where you made a mistake. It’s hard to admit it, but it’s all it takes to learn and to avoid making the same one again and again. The goal is to understand whether your losing trades could have been avoided and what could and should you have done to avoid them.

In my opinion, a trading diary is simply the best tool a trader can have.