Recently, I had a chat with someone that wanted to know why he should use an online trading journal vs his own trading spreadsheet. My answer was quick and somewhat brutal.
“Why drive a ford when you can drive a Lambo.”
Another way to put it:
“I’ll give you two options. The first one is free, but it won’t increase your returns. The other is paid and will most likely increase your returns. Which one would you go with?”
Have you ever noticed on car races the people staring at monitors that keep track of all kinds of pilot and car metrics? These are the guys that watch everything that matters to win a race. Trading should be treated the same way. If you just race a car without monitoring your performance, you won’t know what you need to do in order to improve. Now, you might say pnl is the only number that matters for a trader, but what if you could drastically improve it by understanding how your money is being made or lost. That’s why a trading journal is so important. It is a great way to track your ideas, your metrics and to discover areas that need improvement. It is not about writing how your day went. Below, you will find some of the reasons traders like trading journals.