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The Importance of Having a Forex Trading Journal

By Ashlene

In order for a person to reach their goals there are certain steps that they need to take.

To reach the top of the mountain, you need to climb the mountain one step at a time.

Similarly, to become a good forex trader you need to focus on making a dollar first, then focus on making ten dollars, then a hundred dollars and so on.
A trading journal has proven to be an effective performance and confidence booster when executing trades.
Trading without a diary is like shaving without a mirror. 

 ~Dr. Alexander Elder, Author of Trading for a Living.

What is a trading journal?

A trading journal is a record of observations, experiences, ideas, or reflections kept regularly for tracking progress and for future reference.

Why do you need a trading journal?

  • Tracking progress
When you keep detailed records on your profits and losses it becomes easier to study mistakes made when entering or exiting trades
  • Enhances performance
Psychology and mental state plays a big role in a forex trader's career. Documenting everything learnt from a trade helps identify areas that need improvement for optimal trading.
  • Trading discipline
To become a successful forex trader requires planning and practise. Most traders lose money due to making unplanned and impulsive trades. Having a trading journal is like having a written reminder of the trading decisions that need to be avoided in order to follow the trading plan

What should a trading journal include?

  1. Date when the trade was entered and exited
  2. The forex pair that was traded
  3. Lot size used for the trade
  4. Time frame used to enter the trade
  5. Results of the trade
  6. Market conditions on the day the trade was entered
  7. The risk/reward ratio on the trade
  8. Forex trading goals
  9. Skills acquired from the trade and skills that need to be improved
  10. Emotional state when trading

Trading journal sample



A trading journal keeps you constructive, keeps you learning, and keeps you working on the things that are most important. It is not a tool for simply rehashing the day; it is a tool for self-development.

 ~Brett Steenbarger, Ph.D.– Head of Trader Development at Tudor Investments


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Comments

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    ReplyDelete
  2. Monnika JacobSeptember 27, 2021 at 11:30 PM

    Forex that gives us 100 free can we trade with them or do we have to make a deposit? I am new to Forex and don't know how to use this. Please let me know at PhD Dissertation Writing Services.

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    Replies
    1. AshleneOctober 7, 2021 at 1:41 AM

      Yes you can. Brokers such as XM and FBS do not require a deposit for you to be able to withdraw the profits made from trading the no deposit bonus.

      Delete
  3. DT4X TraderSeptember 30, 2021 at 5:05 PM

    The importance of a sound strategy and strong risk management can not be emphasized more. Forex traders utilize numerous techniques and strategies to identify the best entry and stop points, and the best timing for buying and selling traded currencies. Thank you for sharing these tips. Instant Forex funding

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