Trading Diaries – A guarantee of trading success
Individuals rarely conquer the markets. However, with consistent effort they are able to conquer themselves and take control of their trading behaviour. Most often, the point at which a market participant believes that they are the master of the price action that unfolds in front of their eyes is the point at which they are most exposed to a significant drawdown. Novice traders in particular must realise that there is a very fine line between self-belief (a prerequisite to being an elite trader) and arrogance. At Futex Academy we identify these traits in aspiring traders at an early stage and devote significant amounts of time to encouraging the first trait and minimising the negative impact of the latter.
One method we use to ensure that traders remain objective in the assessment of their ability is to insist upon the completion of a trading diary, every day, from the outset of their trading careers. These trading diaries serve multiple practical purposes whilst ensuring a disciplined approach to a professional trading career. A typical diary would consist of: trader’s goals and objectives, pre-market preparation, post-market analysis, significant technical levels, market-moving fundamental news, volume, roundtrips and profit & loss as a minimum. Each of these elements allows a trader to build up a comprehensive and objective trading history from which vital lessons can be learned.
However, a crucial component of the trading diary should be the honest recording of a trader’s emotional state before, during and after the trading day. There is a very strong correlation between the state of mind of the individual trader and his profit & loss. This correlation should be noted and its effects pre-empted by recording the emotional state at regular intervals in the trading diary and addressing negative emotions swiftly. At Futex Academy the trading diary is public property in the sense that it is available for review, analysis and discussion with the mentoring team. By ensuring traders complete a trading diary effectively and then giving them targeted and effective feedback, traders learn to take control of their trading behaviour. By having the discipline and honesty to complete and share a trading diary, traders take a big step towards conquering themselves – the biggest challenge for any aspiring, professional trader.
Futex Investment & Trading Academy
“The Ultimate Futures Trading Education”
Tags: arrogance, control, emotional state, self-belief
