How often have you started a trading journal with a lot of enthusiasm and then stopped after a few days or weeks? We hear this often and it’s a common theme among traders. But it’s not only limited to the world of trading…
Whether it is setting the goal to run every day for 30 minutes, start tracking your personal finances, doing some reading every night, meditating regularly, keeping track of your meals, or writing down your goals, almost everyone has tried to implement those good habits before…and failed. But why is that and why does it seem that some people can do it so effortlessly?
Every trader knows that keeping a trading journal should be very high on his priority list, and all successful traders highly recommend keeping a trading journal. But how can a trading journal turn you into a better trader, how will it help you and what are some tips that will allow you to journal help you not give up easily?
Journaling holds you accountable
Being a trader is a lot like being self-employed; you don’t have to justify your decisions and, in the end, no one cares about your success (or failure) as much as you do. As a trader, you are on your own.
There is a reason why people who have a workout partner or a personal trainer are more likely to follow through; large corporations have their reporting mechanisms for a reason as well. Once you know that someone will review your work and that you have to justify why you did or did not do certain things, you are much more likely to follow through.
A trading journal is what holds you accountable. We have talked to many traders and the majority reported that once they started using a trading journal, they were more likely to follow their trading rules and avoided repeating the same mistakes – because they knew that had to enter all their mistakes in their trading journal.
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To make sure that you follow through, we developed the 12-week trader development program and we constantly check in on you and ask you to send us your progress to leverage accountability even further.
You develop self-awareness and learn about yourself
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A trading journal is like a mirror that provides an honest view on your trading performance. It shows you immediately when you have repeated the same mistakes AGAIN; it shows you how much money you left on the table by making mistakes and it tells you what you should have done instead.
Edgewonk is like a personal trading mentor – it tells you when things aren’t going according to plan and it provides actionable tips on what to change. Once a trader starts seeing what he is doing wrong in cold printing, he is more likely to act on it. Most traders are not even fully aware of their mistakes or they forget about their flaws too fast because they have no way of keeping track.
Professionals do the things whether they feel like it or not
This is probably the most important factor that separates the professionals from the amateurs. Professionals do the things they know will get them to the next level, whether they feel like it or not.
Of course, it’s more comfortable to watch the football game tonight than missing the first half to journal your trades and going out with your friends is most likely more enjoyable than reviewing your trading week and completing your trading journal. But sometimes, you just have to push through and do the things you know you should be doing.
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Nothing worth having comes easy but once you make the decision to commit to the “uncomfortable” things that you know will make a difference, you will feel great. Being disciplined empowers you and you prove to yourself that you are serious about something.
How serious are you about trading? It takes 2 minutes to become a better trader
No, we don’t have a get rich quick tip for you, but it’s close. We conducted a survey with some of our users and the majority reported that it takes on average 2 minutes to enter a trade into Edgewonk. 2 minutes! A trader who takes 10 trades per week only has to spend 20 minutes every week to keep a trading journal.
How serious are you about becoming a professional, full-time trader? Is it worth it to spend 2 minutes per trade to change the way you trade?
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Professional trading is about developing good habits
What is it that professional traders do differently? It’s not that they have better indicators, know more price action patterns and they can’t predict market moves either. Professional and profitable traders work in an organized and structured manner. They prepare their trading day ahead, they do their market research, know their trading system inside out and they perform a post-trading analysis.
Now compare the average trading day of an amateur trader to the one of a professional. Most traders just randomly flip through timeframes and markets, hoping to find trades and once they are done, they close their platform and go do something else.
Adopting a regular habit and taking 20 minutes after each trading session to sit down and reflect on what you have done is the single best thing you can do for your trading. It makes you more self-aware, it adds a layer of objectivity to your trading, you build character and develop discipline by following through.
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How to make journaling easier? 3 tips!
Instead of just saying that you have to keep a trading journal, there are certain things that can help you follow through:
1 – Reward yourself
For every week that you have successfully logged all your trades, reward yourself. How a reward looks to you is very personal. Maybe you feel great by just taking some time out over the weekend and sitting down with a good book; you can take your spouse to the spa; relax in the park with your family and stroll around; or go see a movie or rent a DVD at home and order some food in.
It is important to connect journaling to something positive and, regardless of your actual trading performance, do something that makes you feel good. Remember, professional trading is about building good habits. It will then automatically lead to better trading over time.
2 – Remove friction
People who exercise know this. When you pack your bag the night before or prepare your running gear in advance, you are more likely to exercise and coming up with excuses is harder.
When it comes to journaling, we recommend placing the Edgewonk application right onto your desktop and make sure to open it along with your trading platform. When you just have to switch tabs and are ready to journal, you are much more likely to actually do it.
2 – Build a routine
Having a routine and knowing exactly when it’s time to journal will make a big difference. Most traders operate in a reactionary mode and just respond to their outside circumstances. The professionals have a plan and set aside time to log their trades and perform a post-trading performance review.
In our 12-week program we help you develop a daily and weekly routine that will hold you accountable. You can also download our free timetable which will help you plan your week. The sample below shows how a structured week could look like.
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