The ability to learn from one’s mistakes is a valued asset in all parts of life. But it’s especially true when it comes to money. Investing is all about money and having a trading diary, regardless if you’re a day trader, or focused on the long term, is a must. Having a record of what you’ve done when opening and closing trades allows you to go around one of our main human flaws – forgetting and repeating mistakes.

In order to learn from past mistakes and to ensure that you consistently execute your trades based on analysis rather than intuition and emotion you need to journal your trades and regularly study your own track record. A trading journal is an invaluable tool for traders to track their progress and insure that they are truly following the trading plan. By documenting every trade, a trader also has the data necessary to evaluate if a trading strategy is the problem or whether emotional/human elements are interfering with the strategy.