by Barbara Stevens
The format of your trade diary is not of great importance. The layout or number of columns is not the key factor as it’s very much a matter of personal preference. What IS important is the detailed content and the specifics that you include. The more specific, the easier it will be for you in your self-analysis to uncover things about you as an individual and how they impact on you as a trader. Thus, the notations that you include as to your feelings, emotions, level of stress, confidence or lack of, how rested you are, paralysis, frustration, elation, palpitations, and guilt will assist you in learning how your personality effects how you trade. This information is invaluable to the completeness of the trading diary and the more detailed description you include, the easier your task of self-discovery will be whether at the end of a week or a month. The facts will be there so you can review with objectivity and reflection.
As individuals, we all bring specific personality traits to any job and trading is no different. Trading is a serious and intense job. Just as not everyone has what it takes to be a nuclear physicist, not everyone has the makings for being a trader. You must accept your strengths and weaknesses and decide if they provide you with the traits necessary for successful trading. It isn’t easy to put yourself under the magnifying glass but the objective data can be surprising as well as rewarding. If you discover that scalping for pennies in a fast paced market raises your blood pressure and makes you sweat, then you might reconcile yourself to the fact that you aren’t going to be a scalper. If you lose your focus and find yourself dozing while staring at the monitors in the afternoon, you would probably want to experiment with trading only in the morning to see if you can be more profitable and focused. Just as some of us are morning people and others are night owls, our internal clock effects out trading style significantly. When money is on the line, our natural instincts take over and all our personal traits and emotions become clear as we often lose discipline that we can maintain under other circumstances. We may not be aware of it until we keep a trading diary and notice how we react to stress. If you include this information in your trading diary, you’ll soon become aware of the internal and external factors that influence your ultimate success in trading.
We all want to discover our personal “trading zone.” That time, method, style, that makes trading almost mechanical, effortless, and unemotional. This, of course, would be perfection, but we can strive to find the optimum that will satisfy our personal quest for a comfort zone in trading. We might never achieve perfection but we want to find strategies that will assist us in our attempts at self-evaluation so we can tune into those particular characteristics that will enhance our positive trading experience. We cannot force ourselves to become someone else, but we can nurture a style that coincides with who we are. Not everyone is meant to be a momentum player or a swing trader. This is not a “fault” but merely reflects who we are as opposed to who we might rather be. The trading diary in any form that is easy and effective for you will facilitate this road to self-discovery. The diary is a reality check to help you in evaluating how you see yourself objectively as both a unique individual and a trader.