Your Binary Options Trading Journal – Writing your Key to Success!
Yes, I’m talking about keeping a diary, a trading journal or whatever you want to call it. I know, it sounds sooooo boring, but please, bear with me. When I read about the importance of keeping a trading diary the first time, it sounded so meaningless and dull. “What should I write anyway?” – I thought to myself. I guess it was partly because I didn’t even have a strategy to work with and hence nothing to write about. Besides, there were so many other things I had to learn about and a diary didn’t seem to be as important. So I chose to ignore this great advice and later even forgot about it. Luckily, after I finally found my own working strategy, I understood why I should keep a diary and today I’ll share with you the great advantages of having one!
Why Should You Start Writing a Trading Diary?
Well, allow me to explain the “why” and the “how” and the… the… hmm, that’s all! Before I answer to those questions let me ask you one, what do you do after a trade has expired? Suppose it was a loss, you’ve just failed miserably and now you’re angry. I know from personal experience that after a failure a newbie trader most likely behaves in one of the following ways:
A. Keeps jumping in more and more trades in order to make up for the losses immediately.
B. Blames everything on bad luck and leaves, very pissed, to do something else.
If you think these behaviors describe you – keep reading. Let me ask you one more question, don’t worry, this is the last question, I promise! Suppose now that you just won a trade, you’ve succeeded delightfully. How would you behave this time? Here are a couple of typical behaviors:
A. Yes, I’m invincible! I’ve got the best strategy ever and I should buy everyone a drink!
B. I should just keep trading endlessly till I’m a millionaire – then I’ll buy everyone a drink!
Okay, I know my examples are awful. But come on, you get the point… right? In case you haven’t already guessed it, none of the above reactions are good. Why? Because each trade, winner or loser, has a valuable lesson to teach you.
How else can you gain experience if you ignore your results if you don’t evaluate and analyze them? This is where keeping a diary becomes useful. Writing down each step that made you confident enough to execute a certain trade is the best way of organizing and enhancing your memory.
The next time you are faced with a similar trade opportunity your mind will act precise and methodical. You will avoid making the same mistakes over and over again and you will recall the correct decisions you’ve made in the past and act accordingly. Therefore, your celebration and anger can wait, first you need to write down your trade while your memory is still fresh.
“Use your journal to learn about your weaknesses as a trader.
Awareness of those weaknesses should soon lead to overcoming them.”
– Dr Thomas K. Carr, Trend Trading for a Living.
How you should keep a diary
Now it’s time to answer the last question – the how? First, you need a place for your diary, and please, for the love of technology, don’t choose pen and paper… It’s best to keep a public and online diary so that you can benefit from other people’s experiences! You can use the forum ‘CommuniTraders’ here at ThatSucks.com*. Simply create your own thread and use it as your personal trading journal. Since trading means dealing with charts, it is best to use pictures in your diary. The more detailed your pictures are, the less you need to write down and explain things. I recommend that the screenshots of your charts include:
– Time and date
– Name of the asset
– Entry & Expiry
– Your indicators of choice
Even though a picture is worth a thousand words, you still need to have a comment section where you describe how you analyzed the charts. But what exactly should you write?
Let me just quote Thomas K. Carr again:
“My Rule of Three says that I will not enter any trade unless I can carefully articulate three reasons from among my list of technical indicators for doing so. Three is the minimum, and more is better.
So always wait until you can satisfy the Rule of Three (at least). Remember, trading is a game of probabilities, and you should always stack the odds in your favor.”
And there is your answer, write down three tings (at least) that convinced you into taking that specific trade! The more detailed and organized your diary is, the easier it is for you to keep track of your recent trades. Furthermore, other traders will enjoy reading your diary and understand it well enough to be able to give you advice. In a short time, you will perform much better and handle your losses and wins in a more professional manner. You will definitely enjoy writing about your analysis once you realize what it does for you. By the way, don’t forget to read other people’s diaries too! Take a look at a couple of trading journals here at ThatSucks.com* for inspiration and then start working on your own diary.
Conclusion – Say YES for a Diary!
I assume we now can agree that a trading diary is necessary for improving your trading skills and your strategy. Your best teachers are your own mistakes and successes and analyzing those gives you the experience you need. When you know how to interpret your own actions you are in control of what you are doing! And thus, the key to success is in your diary!
*Notice – Our Trading Forums Have been Closed – More Details Here
*Is Your Trading Diary Gone? Contact us at ThatSucks(at)info(dot)com and we’ll send it to you!