Forex Trading Journal: Pros & Tips on How to Create One.
A trading journal plays an important part in the trading plans of most experienced and professional traders. Creating and using a trading journal plays a crucial part in any trader’s success. Every forex trader or day trader should maintain a trading journal that’ll help to improve the way of trading performance.
WHAT IS A TRADING JOURNAL?
A trading journal is a must have for any forex trader. It’s a type of document that contains all of the information regarding your trading activity. A trading journal records everything from your trading strategies to your entrance and exit.
Traders keep a trading journal to analyze previous trades and you should keep one as well. It helps you to keep track of your trades and improve your trading.
WHY TRADING JOURNALS ARE USEFUL
The advantages of keeping a trading journal are:
- It can help you identify your strong and weak points
- It helps you become patient while trading
- It stops your from over trading
- It helps you improve your risk management skills
- It spot the best and profitable trading strategies for you
- It helps improve discipline by creating a sense of accountability
- It makes you more disciplined and consistent.
HOW TO CREATE A TRADING JOURNAL
It’s really simple and you can design it according to your preference. We’re going to share some basic steps that’ll help you create a trading journal.
- You can maintain a book or spreadsheet or Google sheet: We recommend using a google sheet because of its user-friendliness.
- Finalize which information you would like to record: Here’s a standard format of a trading journal which includes some important metrics:
- After you’ve placed your stop losses and take profits, immediately record your trades: Make a habit of recording and writing down the details after the trade while it is still fresh in your mind. This way, you won’t have to remember why you made the trade in the first place. Only do this after you’ve set your stop-loss and take-profit levels.
- Gather the data and review the trades after a period of time (daily, monthly, or weekly): Always analyze your trading records daily, monthly, or weekly. It gives you a bird’s-eye-view of your trades which can help you maximize your trading potential.
KEY TAKEAWAY:
- A trading journal helps you to keep a log of your trades and make your trading better.
- It’s a perfect tool to test different trading strategies and find the best one.
- It helps you review your trades to identify your strengths and weaknesses.