Developing and maintaining a Forex trading journal is recommended for successful trading. Basically what this entails is whenever you execute a trade, you write it on a excel sheet or note book and note down the reasons why you entered the trade to enable you to analyze the outcome to improve your future trades.
Why you need Forex trading journal
1. Forex trading journal helps you to keep track of your eventual trade performance As a novice trader, you could be too overwhelmed with the result of individual trade you place but what makes you a professional trader is when you start to measure your trade performance over a long series of trades. Your forex trading journal provides you with a way to keep track of your trade outcome. It helps you to easily identify how well you have performed in a collection of trades.
2. A trading journal helps to keep you more accountable since you don’t have someone or boss monitoring what you do and how you do it. It also makes it possible for you to easily get funding if your trade journal shows that you’ve done well in a series of trades but lacks funds to move higher. In this situation, a journal acts as a proof of your ability to trade successfully. 3. Your trading journal also offers you with a structure you need to build your trading routine. It as well assists you to investigate and concentrate on each single trade feature.
Things that you can include in your trading journal
Entry date :
This is the date you entered a trade
Metal, CFD or currency pair you trade :
It could either be a currency pair or Gold / Silver or stocks.
Buy or sell entry positions :
Record what you did at the position. Did you buy or sell and also note down the particular price level at which you entered and exited the market.
Planned Stop and Structured Target :
You need to record your prearranged stop and target prices.
Other things you could as well include are:
Potential capital Risk :
The amount of risk you are willing to take in a single trade.
Potential Reward :
The amount of money you expect to make for a single trade
Position size or lots :
Your position size on the trade, or the amount of micro, mini or standard lots you traded.
Exit Price :
The price points where you exited trade.
The number of pips you gained or lost on the trade.
Total Profit or loss :
The total amount of profit you made or total loss
Intended risk to reward ratio :
What is your pre-planned risk to reward ratio
Real risk to reward rapture :
This is the risk to reward ratio you arrived at eventually.
Exit date :
Note down the day you closed the trade.
Benefits of keeping the trading journal
1 Keeping trade history records
Keeping your trading journal for sometime would offer you some historical outlook. Apart from keeping a summary record of your trades, it helps you to easily identify your trading account status. You will see how well you did for individual trades and all the trades you’ve so far carried out.
2 Planning Tool
A good trade journal also serve as you forex trading planning tool. It not only provides you with the real trade data, it as well provides information on how you planned for each of those trades. This helps you to set certain parameters to determine entry position, the amount of risk you are prepared to take and your profit target among other trade features.
3 To estimate you trading methods
Your trading journal would as well show how effective your trading strategies are. It will show you the performance of your trade in a varying market environment.
4 Corrective measure
Your trading journal would as well serve as a corrective tool that helps you to get rid of unsustainable habit and practices and helps you to improve on your trades.
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All the information in the website is for educational purpose only. Your capital may be at risk. This material is not investment advice.