Why the trading journal is the holy grail in trading?

Knowing precisely what your trading plan is and making an objective analysis after a trade is closed are the most important things when trading.

“It is emotionally difficult to review your mistakes since the speculator must wade through his own bad trades and blunders. And these are not just simple blunders; these are blunders that cost money. Anyone who has lost money by investing poorly knows how difficult it is to re-examine what occurred. The examination of a losing trade is tortuous but necessary to ensure that it will not happen again.” Jesse Livermore

Top traders are all disciplined and consistent, but one element that a lot of them share is the habit of keeping a trading journal.

I personally discovered my biggest mistakes only after I filled in every trade I was about to take. The trading log is the most useful tool in analyzing trader behavior. It is possible to identify repetitive mistakes that would otherwise not be noticed because the human mind works according to a certain pattern and force us to make decisions that are considered ‘normal’.

Brett Steenbarger said that the “trading journal keeps you constructive, keeps you learning, and keeps you working on the things that are most important. It is not a tool for simply rehashing the day; it is a tool for…