Tracking your trades is important if you want to get better. It doesn’t really matter how you track them, but being able to visualize and refer to your progress over time will help you grow by learning from the past. Many people like to use a diary or notebook so that they can write their thoughts down on paper as they make trades, but because the reality of trading takes place electronically, most people find that once they have a system in place, recording their trades on their computer is far more efficient.
How do you do this? Really, it’s up to you. The broker that you use should keep a record of all the trades you make within your account page, and you should have access to this at all times, regardless of whether you are using a Forex, binary options, or stock broker. This is a good starting point, but it’s really not enough to be thorough. You will also want to record the charts and indicators that you are referring to while making your decision, plus any emotions or thoughts that you have about the trade in particular.
All of these things are important parts of your trading behavior because they show your inner motivation behind a trade. Motivation is helpful because you may find that you are not making trades because they are the best logically, but for another reason, such as chasing losses, a lot of hype about something unimportant, or you like a company’s logo. People make trades for sillier reasons than all of these, so getting to the root of why you execute certain trades will only help you to trim away the bad reasons and focus on the good. Eventually, this will teach you to cut all behaviors that are not beneficial. The goal of keeping track of all your trades over a prolonged period of time is to increase profits, but that’s just a portion of it.
The other part is to make yourself more efficient. By saving money and time, you create a double opportunity to generate higher amounts of profit. You will be making better trading decisions, and you will be making them in a lot less time. That should leave you time to make even more trades if you wish. As long as they are high quality trades based upon your experience and learning curve, you will be giving yourself a growing advantage as you move forward.
How to Do It?
An online journal is actually a really easy way to do this. Just make sure that you can copy and paste images. For example, taking a screenshot of a chart with indicators on it is a great thing to let you see the data you used to make a decision. If you have the ability to insert comments as well, you will be in great shape. A lot of traders like to use Microsoft Outlook’s calendar feature, as well, because you can track trades by day that way. It’s a program that a lot of people use already, you are just getting more usage out of it.
Finally, you need a way to keep score. In the world of finance, money is the way to keep score best, but with trading, it’s more important to track your rate of profit. Everyone starts out with different amounts of cash, so saying you made $1,000 in a week doesn’t mean much. Saying that you started with $10,000 and made a 10 percent profit, though, does. Keep track of your rate of profit, and measure it at regular intervals. If you see your rate going from 5 percent per month to 8 percent, that’s a good thing. If you see a dip, you need to figure out what you can do to fix it. Combining your profit rate with your trade history is the fastest way to learn from your mistakes.