Being a stock day trader is a fantastic occupation that offers the opportunity to make a lot of money. There are many facets to becoming a successful day trader.
One of them is tracking your daily progress. If you want to be successful in trading, having metrics that measure your performance is paramount.
It is easy to let the emotional roller coaster and energy expenditure of being a day trader overwhelm you. You will then become sloppy and not keep accurate records of your trading activity.
Day trading is a job or business, and keeping track of your progress will help you improve your performance. The following are ways for you to track your progress as a day trader better:
Metrics to Track
If you want to track your progress better, first and foremost, you will have to come up with the metrics you want to measure. These metrics will be the benchmarks by which you measure your performance.
The data points you decide to track will depend on your day trading strategy and style. You may also have some metrics for which you have a personal preference. There are traders that will prefer to track only a few items and keep it simple, while others will have over a dozen metrics to track.
The more metrics you choose, the harder it will be to track them and vice versa. Choosing these benchmarks is one of the most crucial ways to keep better records of your trading activity.
People have used journals to record their daily activities for centuries. You can apply the time-tested tradition to your trading activity for better results.
Trading journals are a great way to have immaculate records of your day trading activities. According to this review at https://www.thestockdork.com/tradersync-review/, not all trading journals are made equal. Therefore, you need to discover which trading journal best serves your needs.
You should write down every trade you make and why you are making it. A trading journal should have the tools to ensure you capture every vital element of each trade you make. It should also make it easy for you to record your trades when you make many trades in a day and do it at high speed.
Think in Percentages and Ratios
One trap that many day traders fall into is to think exclusively in terms of currencies and pips. It makes tracking your trading data very cumbersome. Instead, you should think in terms of percentages and ratios.
When you record your trading data in terms of currencies and pips, you will usually have an incomplete statement. The reason is that you will often forget the risk or leverage you took on to make those trades.
On the other hand, if you want to get a complete picture of your performance, you should measure the risk to reward ratio for all trades. You should also measure the percentage gained or lost in a trade as opposed to the currency amount. It will help you get a complete picture of your trading activity, particularly if you want to track it.
Of all the tools you can use to record and track your day trading data, a spreadsheet is the best one. It makes it so easy to organize your trading information; hence tracking it also becomes easy.
You should have a spreadsheet with as many trading metrics as possible. They may include the asset being purchased, the time of the trade, the price, the quantity purchased, the commission, and the total proceeds, among others.
Recording your trading information on a spreadsheet is beneficial because you can conduct other analytical activities to gain a better understanding of the data. Tracking the information hence becomes easier, particularly if you make many trades in a day.
Keep it Simple
There are a variety of ways you can use to track your data. Regardless of the one you choose, you should ensure that it keeps things simple.
Day trading is already a complicated endeavor, and you don’t want it to be the same when tracking your data. You are far more likely to keep better watch over your day trading activities if you can record and process them using a simple medium.
Simplicity should also extend to the way you record information in your trading journal. Start with the smallest amount of data you need to track and add it gradually. Keeping it simple will also ensure that you stick to it.
Tracking your data as a day trader is a vital part of the job. If you can keep accurate records, then you improve your chances of success as a day trader. The above are some ways you can use to better track your information. Things will go much more smoothly if you keep things simple.