If you’re new to the trading world, you likely feel bombarded by all the information and advice. And to make it even more complicated, a lot of the advice contradicts each other. So, where do you even start?
You document your trades and trading strategy.
Regardless of your goals or investing experience, a trading journal is an essential tool for traders. In this beginner’s guide to automated trading journals, we outline everything you need to know to get started with the most important tool in your belt.
Understanding the Importance of a Trading Journal
A trading journal is a simple concept. At the most basic level, it’s a place to record your trades: what you bought, when you bought it, the price, etc.
Unfortunately, many traders don’t prioritize their journals. While you can get away without a detailed trading record for a few weeks, anyone wanting to maintain profitable, sustainable trades must keep a (metaphorical) paper trail, and a trading journal is the best way to do it.
But a trading journal is more than just a record-keeping tool. It plays a key role in helping you improve your trading skills and performance. When you meticulously track your trades, you uncover insights and patterns that can lead to informed decision-making in the future. You can more easily identify the paths that led to loss so you can identify and fix your mistakes and avoid repeating them moving forward. You can also set goals and track your progress toward achieving them.
What’s an Automated Trading Journal?
Automated trading journals are in a league of their own—optimizing your trade journaling experience. As the name suggests, they automate and sync your entries. Automation allows you to organize and analyze data instantly, surfacing insights that empower you to make smart trade and investment decisions.
Utilizing an automated trading journal helps you better understand yourself as a trader so you can build upon your strengths and address weaknesses. From emotional motivations to overzealous trades and poor risk management to shortsighted investment decisions, an automated trading journal provides a clear record of which decisions you made and, maybe more importantly, why you made them.
In addition to tracking trades and results, your automated journal helps you stay level-headed, on track, and with the goal in plain sight. Few things are as fast-paced and high adrenaline as the market. The right trading journal and journal-keeping disciplines will keep you grounded so you can focus and work toward your long-term objectives.
Exploring Trading Journals
Your trading journal is one of the most valuable tools you can use as a beginner trader. Below, we explore the various journal types and compare automated trading journals against their counterparts to help you see why they are the way to go for beginners and beyond. There are 3 types of trading journals:
1. Paper Journals
Paper journals are straightforward: they’re paper notebooks where you write down trades and all the relevant information associated with them. There are a few significant drawbacks to choosing a paper journal, especially as a beginner trader:
- Time-consuming: Recording trades by hand and then manually organizing that data is time-consuming. There’s no search bar in a notebook, so you’re left flipping through pages to find what you’re looking for.
- Prone to errors: It’s easy to record the wrong numbers or forget to record a trade. When comparing trade data, you’re much more likely to make a mistake than with a digital or automated journal.
- Inconvenient: If you choose a paper trading journal, you’re stuck carrying around a bulky notebook whenever you want to record or review your trades.
2. Excel Sheets
Using an Excel sheet as your trading journal eliminates the bulk and some of the other annoyances of a paper journal, but it’s not without its own cons list:
- Manual calculations: Even though Excel has built-in formulas that do some math for you, you’ll still need to manually calculate things like profits and losses.
- Prone to errors: Like paper trading journals, working with Excel sheets makes you prone to recording errors. It’s easy to forget to update trades or accidentally type in the wrong numbers.
- Data loss: If you lose access to your computer or your Excel file gets corrupted, you could lose all your trading entries.
3. Automated Trade Journals and Tracking Tools
Automated trading journals help you optimize your strategy and refine your processes to boost trading success. These specialized programs allow you to track and analyze trades instantly. Automated journals are convenient and accurate. Here are some pros to consider:
- Save time: Instead of manually recording and calculating your trades, automation software does it all for you.
- Accuracy and Consistency: Automated trading journals eliminate the risk of entry errors. These cloud-based platforms ensure your data is always at your fingertips, no matter where you are.
- Customization: The best automated trading journals allow you to customize your template and track specific metrics that are important to you. They also often offer additional features, like performance analysis.
Must Haves to Include in Your Automated Trading Journal
Automated trading journals are the obvious choice for beginners and experienced investors alike. Regardless of your plan or strategy, every trading journal should include a few essential data points for each trade or investment decision:
- Data and time of recording
- Traded asset
- Position size
- Trade direction/strategy
- Entry price, date, and time
- Exit price, date, and time
- Working orders: limits orders and stop-loss
- Profit or loss
- Market condition analysis
- Emotional state before, during, and after the trade
Recording the above data and analyzing it alongside trade results helps you identify correlations among winning trades, guiding and informing future trade decisions.
Gain a 360-Degree View of Your Trading Performance
Automated trading journals help you see everything more clearly. TradeSage journals allow you to store your data, measure trading performance, track key performance indicators, and monitor the metrics that matter the most. Our platform gives you the complete picture of your trading efforts so you can discover what’s working and what isn’t.
TradeSage implements automation to gather, organize, and analyze the following data points:
- Net profit and loss
- Trade expectancy
- Profit factor
- Gross profit and loss
- Trade win percentage
- Post-trade analysis
A profitable trading strategy requires the right data. TradeSage gives you complete visibility throughout your trades to ensure you make the right decisions at the right times to maximize your investments.
Automated Trading Journals Built for All Experience Levels
TradeSage has the solutions beginners need to optimize their trading strategies. Our automated trading journals help you make the most of every trade right from the start.
As a beginner, TradeSage helps you:
- Detect gaps in your trading strategy
- Discover optimal trading days
- Find out what mistakes are holding you back
- Refine your risk management strategy
- Find your niche
- Discover your strengths
Create your TradeSage account today to access the power of automated trading journals so you, too, can trade like a wizard.
