There are many reasons why a journal is important to a trader. Granted, paid2trade.com offers a revenue share but that is most likely the least reason to have a journal. The process of writing your thoughts at the end of the day provides a moment to reflect without the emotional baggage of the trade at hand. By forcing yourself to articulate the reasons for entry, staying, and finally the exit stage of a trade you will find out more about yourself.
What the trade part of the trading plan? Did you cut your winner shorter than you should have or let a loser go on for longer than you should have?
Was the trade based on back testing and a known edge, or did it just appear to "make sense" at the time.
After writing hundreds of entries over the years in various journals, I learned that it was no fun to write in a journal how I lost money in a day when I didn't need to. More importantly, many days I missed out on trades that I would have made and would have been profitable had my attention not been focused on an impulse type of trade moments earlier.
Getting feedback from others will help with your trading. This is double edged and can sting at times but is vital in learning. Having others reply with how 'stupid' a trade is or how 'great' a trade is, will often provide a new look. Replies often include reasons for not doing what you did regardless if you made money or not. It may not be the most enjoyable reading, but it will improve your trading quickly. Receiving feedback is like having mentors studying your every move and telling you how to adjust and what to look for and it all comes for free.
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Another reason and one of my favorite reasons for having a journal is the ability to look back and see how you’re trading was X amount of time ago and see what is different now. I can see by looking at older posts going back five or more years ago how much progress I have made. It's very confidence building to know after as many years I have traded I am still learning and growing. Sometimes I will run into an old post and see a setup or thought process that was put on the back burner. It reminds me to continue with studying a signal, method which has led me to fully use trading setups that would have otherwise been totally forgotten about.
Giving is receiving. Over the years I have had many people tell me that my journals have help with their trading and growth. It’s a highly rewarding feeling and a major confidence building (especially after getting your head handed to you in a tough trade). The additional confidence shows up on the next trade when everything appears to be a "little clearer" with entry and exit.
Most traders I know would love to manage other people's money. Running a fund or hedge fund means you are trading under a microscope. Having a public journal can help prepare a trader for the experience of having to "drop their pants" for the world to see.
Yes, you may make extra "free" money by sharing your trading thoughts. Trading journals are very popular to read (the ultimate reality show), and you can see by the number of views my journal has it is maybe the most popular thread in the trading forum / paid2trade.
These are some of the reasons why I believe investors and traders should keep a journal of their trading. As other reasons come to mind I will add them.
Do you have any reasons why a journal is a good idea? If so please share them.
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