Is Forex Trading Journal a Must Have?
If you are new to trading, you definitely need to know what forex journal is and how important it is to your trading.
So what exactly is a forex journal?
It serves as a diary for your trading career, it is where you write down things like what you see, why you enter a trade, when you exit a trade and what mistakes did you make in your trade.
Why is it important to your trading?
With a forex journal, you will be able to keep track on the reason why you decide to enter a specific trades and how many lots did you enter. As the price progress and you either get stop out or you exit the position, you got to record them down.
If you are stopped out, you need to write why you are stopped out and what causes the stopped out so that you can prevent them again. If you exit the position with a profit, you should write down how you arrive at that price projection.
You can ask around and you will find that almost 100% of successful traders keep a forex journal for themselves as a reference to their everyday trades.
Below are some examples of what you should enter in your journal:
1) Pre-trade Analysis: You should always have the habit of doing a proper analysis before you start to place your trade. You can record down candlestick patterns that you see like double top, inverted hammer etc. If you are trading with pivot point, you should also enter the pivot level for the trading period.
2) Entering Criteria: You should also enter the price where you enter a trade and how many lots did you enter as well as the reason why you decide to enter the lot. Examples are trend line break, breakout occurring etc.
3) Exit Criteria: Next you should also write down your projected price limit and stop loss so that you know your exit position. There may be times where the price may move against you causing your position to be stopped out and these should also be recorded for reference purposes. If the price moves in your direction allowing you to make a profit and exit, you should enter your exit price.
4) Mistakes or Lessons Learnt: In every trade, there will always be some lessons learnt and you should record them down so that you can make use of them in future.
The above are the things you should include in your forex journal and you should make it a habit to keep one too.
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