Many traders may wonder why we have to write our own trading journals today when real-time trading records are readily available. It is true that the real-time record not only includes the profit and loss of each transaction, but also tracks the account balance, calculates the margin limit and the profit and loss amount of each transaction, which is very convenient and fast. But manually produced paper records have many advantages over real-time records.

1. Trading Records

First, a transaction log can show us the history of transactions over a period of time. It is not just a summary of transactions, but also allows you to see your account at a glance, such as tracking the cumulative effect of each transaction. In other words, a trading journal is a database of individual transactions, from which you can clearly see your trading frequency, trading results, currency combinations with the highest returns, and the most appropriate time frame. In short, through unremitting recording, you will get a lot of information for reference.

2. Planning Tools

A good trading journal can not only provide you with a real data record, but also provide information on investment planning. Before placing a trade, you can set various parameters such as entry point, acceptable level of risk, profit target and how to manage subsequent trades. In other words, a transaction journal is a tool for digitally recording your ideas and it allows you to put ideas into action. It is the basis for both planning and practicing transactions.

3. Methodological Validation

Over time, a trade journal can also give us a windfall in that it will help you validate your investment approach and see if it works well in changing market conditions. The trading journal will provide answers to a series of questions, such as whether your investment method is effective in a trending market or a sideways market? What about performance in different time frames? How does your stop loss setting affect the trade? Is the stop loss too high or too low? In order to pursue the answers to these questions, your trading journal must be comprehensive and logical.

4. Mindset Adjustment

One of the most useful features of a trading journal is that it can actually help you change your mindset and help you turn destructive thinking into constructive thinking. When you execute your trades according to your plan, you will build up your confidence little by little. Whether you win or lose a trade, you won't be too surprised, so you are more resistant to anxiety. Even if you lose a trade, you will no longer think you are a loser. In trading, psychology and emotions are key factors. Fear and greed for the market are natural expressions of human nature. If you win, you want to gain more; if you lose, you will feel panicked seeing the account number slowly decrease. Therefore, in the face of the ups and downs of the market, self-confidence is particularly important.

The trading journal collects a lot of statistics from which you can develop a clear trading plan and review it after the transaction is completed. Most importantly, you will continue to improve your trading skills from it, which is a must for successful traders. If you want to get a better return on investment, the transaction journal will be your best helper.

（Writer：Tivy）