To improve your competence as a trader it is necessary that you invest time in practicing and training. Besides that, you can use some tools and tips.
Next, we delve into the trading journal, which can become your best companion in your learning process.
How to improve your competition as a trader
The trader is not born, he is made. If you have been in this sector for some time, you will have realized the importance of being constant. During your first steps, you will have followed to the letter the guidelines that you have learned from expert investors. And you may or may not be ready to take flight. In any case, it is necessary to follow a growth process to improve your operational performance.
The trade record
The first tool you need to improve your trading performance is a trading journal. If you are not able to analyze your successes and mistakes, you will hardly be able to improve. The best thing about this instrument is that it is easy to make and absolutely free. For this you can use any basic spreadsheet program. The three most frequently used alternatives are:
- Microsoft Excel.
- Open Office Calc.
- Google Spreadsheets.
To make a good trading record, it will be enough for you to create a data table, where you must collect the relevant information for each of your operations. But what is this relevant information?
- Mainly, it will be trading data. These should include everything from the instrument to the strategy you employ. The more data you collect, the more useful your journal will be. So you should record the order types, addresses, entry and exit prices, among other issues.
- You should also include the emotions you feel at each moment of the operation. Knowing yourself is one of the challenges of trading. Limiting compulsive gambling will improve your operating performance.
- Finally, you should record the conclusions of your operation. Write down if you have been successful, if you have learned something and, especially, what your mistakes have been. Knowing your mistakes will help you avoid them in the future. That is why it is so important to make a good trading journal that will help you increase your operational successes.
How to use the trade log
The advantage of making your registration in a spreadsheet is that later you will be able to consult data based on any of the categories entered.
For example, if one of your parameters was “retracement strategy” it will be enough for you to filter your operations to know when you have been successful and when you have failed with this strategy.
If another of your parameters was “uncertainty emotion” you will be able to know if when you have such a feeling you are more conservative or not, as well as its effect on your operating performance.
In this way, the trading log will offer you verifiable information about your past successes and mistakes so that you can develop your own and efficient style.
Note that you can also use the registry of trading for simulations. For example, you can analyze the risk / reward ratios of different possible outputs. In this way, you will not only be able to analyze the R ratio that you achieved in your operation, but also the one that you would have obtained from closing the operation at another time.
Don’t forget to supplement this record with as much personal information as possible. Although there are alternatives that will extract objective data from your trading platform, there is nothing like a journal to record your expectations and motivations. These data are essential for you to understand psychotrading.