We have already talked about the benefits of keeping a diary. Trading diary helped to reach success to many financiers. And scientists explained how it works.
Probably the most common tool for psychological support among traders and portfolio managers is a diary. It is not only a great way to keep track of what we are doing and why, but also a powerful tool of self-training.
However, when the training period is over, only a few continue to keep records. Usually, we don’t have time for it under extremely dynamic and demanding situation. Outside the financial sector, this trend even more clear. Today it is difficult to find someone who is constantly keeping a diary and use it for the intellectual and professional development.
However, due to a number of science-based reason it is very useful to do this. One can do it using pen and paper, others using more technological way. And here are the main reasons to do this:
1. The first reason: diaries reflect and shape our reality
Records can tell a lot about us and our state of mind. They also affect our feelings and perceptions of the world.
James W. Pennebaker found that everyday language reflects basic social and personality processes. Other researchers have shown that the resistance to stress and failures is reflected in the words that we tend to use more often.
Mentally stable people prefer verbs “do”, “work”, “create”. These words are often used to describe the goals and intentions. Less stable people tend to fill their diaries with emotional expressions. For example, novice traders mainly write about the joy from winning trades, and upset from the losses.
James W. Pennebaker in his further studies found that a written expression of their emotions has a healing effect. When patients describe a stressful situation, it is marked with health improvement. This process was especially outstanding in those cases, where problem description allows to have a fresh look at the problems. Our language not only reflects reality, but also helps to shape it.
In another study, participants were asked to keep a diary of “gratitude”: write down everything that they were thankful. This simple practice has brought significant benefits – patients reported about improvements of their feelings, sleep and mood.
However, those diaries that are written after a series of failures and the pages which describe just what went wrong, are of little use. Cause expressed written thoughts not only reflect our reality, but also form it. So, obsession with problems may reinforce stress.
Thanks to our records this internal dialogue becomes more substantive. With the right approach, diary turn into a psychological mirror that shows who we are – and who we can become.
2. Reason two: the diaries improve the quality of education
Several years ago, during an informal survey of traders, it was found that the least successful of them use the recording to pour out their feelings and thought.
On the contrary, successful traders wrote mainly about the goals for the future. These diaries have become the basis for practice: evaluation of experience, corrective efforts and analysis of their results.
Thanks to these observations was designed format, which is useful in many situations. The diary’s author must answer the following six questions in each entry:
- the things I have done very good today, and how I did it?
- the thing I have done not so good today, and why?
- what shall I do tomorrow to develop my success?
- what shall I do tomorrow to prevent failure?
- how well I have realized the development aims that were set yesterday?
- how successful were the steps to prevent failure that were set yesterday?
In this case, the self-assessment turns into the attainable goal. Efficient diary is not only captures what happened, but also links it to the present and the future.
Seph Fontane Pennock describes the exercise “to find the best yourself”in his article about positive psychology: you should describe your ideal future. If we go further and turn this exercise into a permanent process we will get an “effective diary“. After some time, the author not only get used to move towards the ideal, but acquire the skills of further development also.
3. The third reason: the diary is a tool of self-knowledge.
Often, we stop to take notes because they are too cumbersome and time-consuming. There are some ways to solve the problem. For example, to make it as a habit: make each record in the same time and in the same place for a month.
But we should not forget that the diary allows us to understand and structure the internal dialogue, which is an essential tool for self-discovery. The most secret thoughts may materialize in it for the first time. And among the many reasons for its, this reason - probably the most important.