Traders can enhance their trading returns by analyzing what they do properly and where they go wrong.
The first and most noticeable difference between playing in formal competitions and casually was the added component of recording your moves.
The realm of chess has a lesson for traders.
In official chess tournaments, players promptly record each move they (and their opponents) make. Players must do this for every move, and if they do not, the arbiter has the authority to disqualify or annul the match outcome.
Keeping a game log allows you to go back and hunt for clues to unlock your opponent’s plan, or even just go through your own plan.
What’s more, the best part? Keeping a record of moves reduced errors and increased the victory rate.
Can now draw many analogies between chess and trading in the stock market. Aside from strategy, risk management, and preparation, the habit of jotting down your moves is similar to trading journaling.
Many traders are too lazy to keep track of their trades.
Why should you bother keeping a journal? Isn’t it true that the only significant goal is to execute transactions and profit? That is where we make a mistake. Journaling transactions allows us to understand the strengths and shortcomings of methods and, as a result, improve our trading settings. Journaling forces us to be honest with ourselves.
Trading is likewise a strictly intellectual activity in which emotions have no place. When money is involved, decision-making becomes emotional.
Journaling also helps in this situation. Keeping a record of trades allows you to determine how many errors were caused by emotional triggers, and you can then determine how to remedy the issue.
According to a study conducted by UK Spread Betting channel on two million traders worldwide between 2011 and 2021, more than 80% of profitable traders examine their prior deals. Post-trade analytics raises an average trader’s returns by approximately four percent each year.
The majority of traders ignore post-trade analysis and avoid journaling. This is one of the underappreciated reasons why only 5% of traders profit in the trading community.
Trade journaling and post-trade analysis can help all traders improve their trading success with little effort.
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