Binary Options Trading Journal
A binary options trading journal can be used by traders to identify strengths and weaknesses. This 101 guide covers everything you need to know about creating a binary options trading journal. This includes an overview of why recording your trades can be helpful, the data to collect, the formats you can use, and what to do with the findings. Find out how to use a binary options trading journal in 2023 to improve your win rate.
How To Use A Binary Options Trading Journal
Binary options journals are used by beginners and experienced traders to keep track of their trading activity. The purpose of the journal is to act as a ledger that provides data for the owner to use when analyzing their own trading patterns and behaviors.
It is not uncommon for binary options traders to keep journals for months or even years. The more data you collect, the easier it will be to identify errors and opportunities to improve.
Binary options journals can come in the form of spreadsheets on Microsoft Excel or Google Sheets, downloadable PDF documents, or even physical books. Some providers also offer a free or paid-for journal service that enables users to automatically record their results by linking directly to their trading platform. We have reviewed and rated the best trading journals in 2023.
Information To Include
Below are some basic points to include in your binary options journal entries:
- The date and time of the trade – 05/011 at 16:30
- The underlying asset traded – Tesla (TSLA) stock
- The type of binary option – High/Low
- The direction of the trade – High/Up
- The size of the position opened – $200 stake
- The live tools and indicators used to inform the trade – Bollinger Bands
- How you felt about the trade – Impatient/Anxious
- How the trade ended – out-of-the-money ($200 loss)
Note, you can customize the notes you take based on your own preference.
Reading The Results
A key aspect of binary options trading involves learning from your mistakes and managing your emotions. Keeping a binary options trading journal can help you to identify the emotions you felt before and after any trade, as well as learning from any mistakes that you make. Learning from others will only get you so far: you must learn about yourself and your trading habits to make profits in the long run.
If you experienced a higher percentage loss this month than the previous month, your binary options journal should contain the data you need to identify the possible causes. Factors could have included a change in strategy and tools, your mood impacting your trading decisions, the time of day you are trading, and the type of binary option used. Once you identify a common theme or pattern, you can then make the necessary changes to your strategy and approach.
Tips For Creating A Binary Options Trading Journal
- Choose A Format/Method – Popular free or low-cost software for maintaining a trading journal includes Microsoft Excel, Google Sheets, and Evernote. All of these options allow for data to be turned into graphs and spreadsheets for further analysis, as well as enabling traders to include pictures for evidence. Some binary options traders also prefer to use a physical journal to keep track of their trades. For those willing to spend money on their binary options journal, TraderSync ($359.40 per year) and Edgewonk ($169 per year) offer user-friendly templates that sync with trading platforms. TraderSync also offers a 7-day free trial.
- Be Consistent – The only way for your binary options trading journal to provide you with accurate data is to consistently update it whenever you make a trade. This includes every win and every loss. After collating enough data, patterns in your trading behavior will become apparent. These patterns could suggest that certain indicators tend to give you more wins, or particular strategies and underlying assets that you should avoid. There may also be a specific time of day when your trades are more successful.
- Use Templates – If you do not want to create a binary options trading journal, there are many free templates you can download onto your Windows PC or Mac. They are often already formatted in PDF or CSV for a seamless downloading experience. If you are using online software for your binary options journal, use built-in chart generators to make the data easier to read once you have accumulated enough entries. Also keep your journal entries concise. This will make your analysis quicker and more efficient.
Final Word On Binary Options Trading Journals
Keeping a binary options trading journal enables you to review and learn about your trading behaviors. It is an excellent way to identify which strategies, trading hours, and assets work best for you. Studying patterns in your trading behavior also helps you to detect what environments and strategies do not work for you. Use this article to start your own binary options trading journal today.
How Long Will It Take To Notice Patterns In My Binary Options Trading Journal?
The more data in your binary options journal, the easier it will be. This does not necessarily mean the length of time, but instead, the number of trades that you record. The longer you wait for dense data, the more accurately you can predict which of your trading behaviors are likely to win, and which ones are likely to lose.
How Much Information Should I Add To My Binary Options Trading Journal?
In the beginning, start with the basic information. This includes the time and date of trades, which indicators were used, the outcome of binary options trades, the contract lengths, the payouts offered, and how you felt when making the trades. These parameters will likely change as you develop an understanding of what you want to get out of the journal – be it to improve your choice of underlying assets or your use of technical strategies.
What Should I Use To Make My Binary Options Trading Journal?
Avoid paper/physical journals. This is because you are heavily limited by pen and paper, while software like Microsoft Excel provides quick and efficient ways to present data. Some firms with fees also provide journal software that automatically syncs with your binary options trading platform.