Want to start your CFD trading journey the right way? Then keep reading! In this article, we’ll be tackling the art of journaling. Tracking down your trading journey is a great way to keep a close eye on your trading tactics, history, successes and failures.
Most successful traders and investors start journaling early on, this is to help them improve their trading strategy over time, by spotting patterns from previous trades. Journaling is an essential practice to consider and is exceptionally important for starting traders!
So if you’re wondering where to start, below is everything you need to know about how to start and how to maintain trade journaling!
1 – Jot down basic information
For the first step of trade journaling, write down basic information about your trades. To give you a better idea of what that may look like, here’s an example of a basic information trade list:
- Date – Write down all the dates of each trade you make.
- Instrument – Record the specific CFD instrument you’ve traded. (ex. Gold CFD, Apple CFD and so on)
- Position – State whether it’s either a long or short position.
- Size – Take note of the number of CFD contacts or units you’ve traded overall.
- Entry price – Indicate the price at which you entered a trade.
- Exit price – Indicate the price at which you exited a trade.
- Stop-loss and take-profit levels – If this applies to you, record the levels when you’ve set your orders.
2 – Note the trading strategy you’re using
It’s critical to completely explain the reasons for entering this particular trade while outlining the trading strategy or logic behind it. This requires a careful examination of both basic elements like economic statistics, corporate profits, and geopolitical events as well as technical indicators like moving averages and RSI.
The investment must also be protected by taking risk management strategies into account, such as stop-loss and take-profit levels. It’s also crucial to talk about any outside factors or market mood that could have influenced the choice. Expanding on these points will help us understand the nuances of the trading strategy used in this particular case.
3 – List down all your risk management strategies
Describe your risk management policies in detail to ensure that everyone is aware of them. Indicate the portion of your trading money that is at stake for each transaction while taking your risk capacity and total portfolio strategy into account.
Include any precise guidelines you use, such as how you size your positions, where you put your stop-loss and take-profit orders, and whether you employ trailing stops. Describe how these steps fit with your financial goals for the future and your capacity to protect money amid challenging market situations.
Readers may learn more about the caution and discipline that go into your trading technique by reading a full explanation of your risk management tactics.
4 – Jot down your trade management tactics
Giving a thorough account of the steps followed during the trade is crucial in the field of trade management. Included in this is a thorough explanation of any modifications made to stop-loss and take-profit levels in reaction to altering market circumstances.
Explain if you used scaling tactics, such as increasing or decreasing the size of your position, and the thinking behind your choices. Readers may get important insights about your flexibility and decision-making skills while actively managing the changes in the market by digging into the complexities of trade management.
5 – Market conditions, List them down!
Examine the market environment in detail at the time the trade was initiated. Describe the surrounding elements, such as market turbulence, noteworthy news stories, or important releases of economic data.
Examine how these circumstances affected your decision-making and the justification for the transaction as a whole. Additionally, describe the larger market movements and mood that could have influenced the development of your trading approach.
Readers may better grasp the environment in which your transaction took place by reading an in-depth examination of the outside factors that were involved, which increases the transparency of your trading strategy.
6 – Journal with emotions!
Explore your emotional state thoroughly during the trade. Illuminating the range of emotions you experience, from confidence and nervousness to tension. Exploring these emotions, their causes, and how they affect our ability to make decisions highlights how important emotional control is in trading.
Go into more detail on the psychological elements, such as how mental techniques like mindfulness and emotional regulation were used. By shedding light on the complexities of your emotional journey, readers may get insightful knowledge about the psychological aspects of trading. And the techniques used to support emotional resilience and decision-making in the fast-paced world of finance.
7 – Write down your performance metrics
It is crucial to undertake a thorough study that includes important performance measures that go above the current trade result in the field of performance evaluation. Determine and record the trade’s profit or loss, while also shining light on the risk-reward ratio and highlighting the capacity to strike a balance between prospective rewards and inherent hazards.
Additionally, provide the percentage gain or loss about your trading capital. This is to illustrate the trade’s wider effects on your entire portfolio. Readers may acquire a more comprehensive picture of your trading performance and risk management skills by providing a broad perspective of this data, which increases the transparency of your approach to the financial markets.
8 – Come up and write down your trade execution
Provide an in-depth description of the strategies used in the complex world of trade execution. Indicate whether you choose a market order, limit order, or stop order, and explain the reasoning behind your decision.
Share whatever information you have on any execution or slippage problems you may have had, as well as how you handled them, to demonstrate your flexibility and risk-reduction tactics. By providing a thorough look into the trade execution process, you may help readers better understand how precise and adaptable your trading strategy is in the ever-changing environment of the financial markets.
9 – Create an analysis for longer-term
A deeper analysis of your trading results and trends over time is made possible by often reviewing your trading log. Examine your entries carefully to identify recurrent success patterns and places where obstacles return often when CFD trading.
This thorough, ongoing examination may offer priceless insights about your changing trading style, your strengths, and areas that require further development, allowing you to modify and enhance your approaches for sustained success in the financial markets.
10 – Write down what you’ve learned
Once you close a trade, try jotting down everything you’ve learned. May it be a new technique to speculate, wrongs you’ve done in trade, little details you’ve noticed and so on. So basically in this part of your journal simply let your thoughts run. Write about everything you’ve learned about your experience.
Then, analyze everything from your winning to your losing trades. This is to find out and identify patterns or mistakes to fix or correct next time.
11 – Keep a physical note of your passwords and usernames
People these days commonly type down their passwords and usernames on their phone’s notes. But the danger of that is, what if your phone gets a virus? What if it gets damaged? What if it gets stolen? So that leaves your personal information at risk. So try to keep a physical note of your passwords and username!
12 – List down your long and short-term goals THEN adjust!
Use the insightful information from the journal to create precise and defined trading goals. These objectives should be based on the study of your journal, addressing any areas that need improvement and maximising your strengths.
Additionally, carefully modify your trading strategy to fit these new objectives. Ensuring that it is well-structured and adaptable to maximise your chances of long-term success in the always-changing financial markets.
