It’s one thing to create a trading journal, but it’s an entirely other thing to know how to implement what you learn from it into your trading system. Using a trade journal effectively can turn an unprofitable trader into a profitable trader.
Before you enter any trade, you need to have a good reason for doing so. This is where your written document comes in handy.
Your written document is also where you’ll be making the argument over whether a specific trade idea you have is good or not. Your trade ideas should be turned upside down and inside out, so you can spot the strengths and weaknesses of each one.
Once you’ve got your thoughts and emotions written down, it’s time to turn to your spreadsheet.
Your spreadsheet is less of a creative space than your written document and more of a logical space. This is where you’ll be recording all of your trades, so it’s important that you keep it neatly organized and up-to-date.
An important factor in having a successful trading journal is measuring your successes and failures accurately. With your spreadsheet, you should ensure you keep accurate records so you can gauge whether the ideas you’ve developed in your written document are profitable or not.
A good habit to get into is to record your trades the moment after you execute them. That’s when they’ll be fresh in your mind, and you’ll save yourself time in the future.
Another good habit to get into is to review your trading journal spreadsheet every single day. That way, you can get a bird’s-eye-view of your portfolio of trades, which can give you some insights into your level of exposure as well as if there’s room to enter any more trades.