How A Daily Journal Can Save You Money Trading In The Stock Market
A lot of day traders including myself use a blog to express their trading experience as a form of self-help, a form of review and self-reflection of the trading day in an effort to improve our self's and our trading. However, there are aspects of our lives that may be affecting how we think and act; bottled in our minds if we know it or not. Some days we feel motivated, and positive about our future, "life is good". And then we all have those days where we would rather just be alone with our own thoughts to try and figure it all out.
Tim Ferris author of "The 4 Hour Work Week" wrote here a good description about the importance of using a journal, he provides (his) two very simple reasons for doing so below.
1. I’m trying to figure things out, and this might help.
2. I’m just caging my monkey mind on paper so I can get on with my F#$@! day.
I especially like reason number two, if trading success has been a challenge, it's probably safe to say that you have dealt with some extreme emotions. Without taking the time before putting on that first trade, you are putting at risk your capital without understanding your current frame of mind. How many trades have you taken that you regretted taking because you know it is not part of your trading plan... so why did you make that trade?
I will venture to say that by using a daily journal as part of a daily routine before putting on that first trade may be as important as using a stop order. To journal your thoughts, current emotions and motivations before taking that first trade can be like using a "mental stop" (I just coined that). Unlike the average Joe/Jane who punches a clock at his or her 9-5 job, not enough sleep or a bad day generally, will not affect how much money they make or lose. As day traders, we do not have that luxury.
"Be careful of your thoughts, for your thoughts become your words. Be careful of your words, for your words become your actions. Be careful of your actions, for your actions become your habits. Be careful of your habits, for your habits become your character. Be careful of your character, for your character becomes your destiny." — Chinese proverb, author unknown