Having a proper trading journal is an important aspect of trading. After all, it’s the only way to measure yourself and see whether you’re following your trading plans or not. It also helps points out areas of your trading that may need improvement.
But let’s face it, journaling isn’t an easy task. Most traders are either too busy or too focused on their trading that they don’t fill up their trading journals right away. You could put it off for after the trading session, figuring you’ll remember everything anyway.
The problem with this is that perfect recall is very rare. According to cognitive psychologists, the human brain is wired to remember what comes first and last in a sequence – everything in between becomes a blur.
For forex traders, this means that we tend to focus on the entry and exit of our trade, but we don’t pay nearly enough attention to what we are thinking as the trade is progressing. This prevents us from writing down our thoughts, emotions, and analysis in our trading journals. This then causes us to overlook our mistakes, which holds us back from improving.
One way to overcome this and maximize your trading review is to videotape yourself trading. The good news is that there are now programs and apps that take videos of your computer screen as you trade and no, we’re not talking about the NSA.
Here are the main reasons why taping your trades can help fast-track your trading development:
1. You’ll know EXACTLY what happened to your trades.
Taping your trading can help you review and focus on both how YOU traded and how the MARKET moved. As you’ve probably learned from experience, it’s not that easy to remember exactly everything that occurred as you traded.
Videotaping can help you overcome the problem of recall and allow you to have a more detailed assessment of your trading decisions. It will help you remember the thoughts that went through your mind as your position was open and give you a basis to review your analysis.
2. You’ll easily judge your own trading performance.
Having your trades on video can help reveal flaws that you don’t
usually notice. Was your currency analysis completely off? Did you have a
problem with the actual execution? Were there any market elements or
signals that you missed? Watching tape of your trading performance helps
answer these questions.
3. You’ll trade as if you have an audience.
Being on record makes you more alert and focused since you are aware that you are being watched and evaluated. This can make you more conscious of the decisions that you make since you know that you’ll be scrutinizing your trading performance later on.
Staying disciplined is important if you want to make videotaping work positively for your trading. You have to set aside some time to review your tapes on a regular basis, on top of the time you dedicate to actual trading. You can opt to set aside an hour or two after market hours to review your tapes, and make sure you establish this as part of your routine.
Taping your trading may not be the easiest way to boost your trading development, but it can be one of the most rewarding especially if you’re consistent with it. Give it a try and share us your experience!