Trade journals are extremely important to new traders. They play an important role in the development and refinement of a trader’s skill. Unfortunately, most traders don’t keep a journal. Even worse, those who do keep a trade journal often don’t use them properly.
There is more to a journal than just trade data. Entering your price in, price out, and profit/loss is not the point of a trade journal. Your trading platform already has that data automatically captured for you. This data is important financial data, but it won’t make you a better trader. See Figure 16.1
The secret to a trade journal is your mind. Your mind does not know the difference between a thought and reality.
Your mind simply processes electrical-chemical energy. The energy stored in your brain can be from a memory of a past trade. It can also be from visual input from an outward sense, such as chart images seen with your eyes.
The images get converted into electrical-chemical energy—the same as a memory. To your mind, there is very little difference between your last trade and the trade you are in now. They are both just electrical-chemical energy. Both are real.
This can work for you. If you keep and use a trade journal properly, you will gain at least three years of trading experience for every 12 months that you actually trade forex. This means you can quickly become a much better trader than the vast majority of other novice traders and hopefully be on the winning side of ...