One great way to become a more profitable binary options trader with time is to keep a trading journal. This is a great way to become more accountable to yourself and to analyze your situations with a greater degree of objectivity. There are a lot of things you can miss if you don’t write things down, and ultimately a trading journal will be able to help you not only learn more about the technical aspect of trading but also about yourself. What should go into a trading journal, and when should you work on it?
Learn By Keeping a Trading Journal
Before you place a binary options trade, take out your journal and make a note about your trade, your rational for entering (and for choosing your expiry time and any other relevant factors), and obviously the date and time of the trade. As the trade unfolds, you can write down any observations you have. If you decide to exit early, you should take a note about that and why you did it. If you choose rollover, that should go in your journal, too. You may even write about your emotions as the trade unfolds. And then when the trade finally reaches its conclusion, you should note down whether you won or lost, how you feel about it, and what happened if you understand it at this point.
Later in the day (or at some point after your trade is done and your emotions have calmed down a bit), you should come back to your journal. Have a look over what you did and what happened, and consider different aspects of your performance. If the trade was a win, why was it a win? If the trade was a loss, why did you lose? Was the trade in a poor context? Did you fail to properly apply the rules of your trading methodology? Did you exit early when you should’ve stayed in? Did you rollover when you should’ve gotten out? Did your emotions impact your performance? Did you take the trade because you saw a great setup, or because your pride over your last win drove you to place another? Did you exit early because you were under confident after a previous loss? And so on. Do you think your trading broker was fair in the trade? Did you place the trade from your PC or via a mobile trading app?
There are a lot of questions you can ask yourself when you’re analyzing your trades. As you keep trading, you’ll have more and more records you can look back at, and you may start to see patterns. Patterns that lead to losses can be remedied, which should curb your losses and help you start winning more often. Patterns that lead to wins can be identified as well. This is how keeping a journal can help you to adapt and optimize your method. It’s also a good way to spot changing market conditions and see how they’re impacting your results.
You’ll also be able to analyze your own emotions and discipline and figure out your strengths and weaknesses. This is all part of becoming a better binary options trader. That’s something else you can journal about. Make separate entries when you spot trends and record what changes you’ll be making to modify your methodology or your behavior, and then log the results as you see them starting to stack up. A journal is an indispensible tool in binary options trading.