Besides the journal that your broker provides for you where you can keep track of your actions and the market movement, here you will find four good reasons to keep your own record.
The broker’s journal can’t give you exact state of mind in a certain period of time, but your journal will. You will have a perspective of the time line from your point of view, not your broker’s. The way you gave certain advantage to certain moves will give you more detailed information about a certain situation which can give you different source for something you want to decide on in present time’s trading.
Trading journal will service you as a wonderful trading planner. As you trade, you note your actions, plans and outcomes. You can set your goal, define the risk that you were willing to take and explain what went on. That way you can have the numbers that describe what happened additionally described for the future analysis of your trading.
Also, as long as you keep an accurate journal, you will always be in a position to know exactly why you did something and see the result of your ideas, not just your action.
Keeping a journal of this kind will develop your mental strength regarding trading. As you explain your moves to yourself, you will furthermore understand what is going on. That way you will become a more self-confident trader.
The journal should be run in a way that you have columns for your trades where you will handwrite input the data of your trading actions. Of course, you can use excel sheets which will help you reduce simple mistakes, but handwritten journal will keep you closer to your transactions.
For each trade you should have a section where you can out an explanation of why you did something, for example: “I assumed the dollar to weaken as the Federal Bank issued this or that statement.”
Or: “I have reached a peak and therefore I must place this order…”
Having a printout of description of the transaction or screen shot of it will help you further more. Keeping a separate book for each system of trading will enable you to look for your history more easy, and you will also have a series of trading with one system in one place.