Why Keep a Forex Trading Journal?

It is a tedious task when one thinks about the practice of keeping track record of every single trading idea, decision and outcome. This is a good practice that holds the key to long term success in the forex market. I’ll outline some of the benefits of maintaining such a healthy trading habit.

Why Maintain a Trading Journal?

A trading journal is necessary in that it allows traders keep track record of their trading performance over a period of time. Newbies a lot of the time dwell on the performance from every given trade, but experts in the industry are fully aware that their trading performance is a measure of long term activities in the market. This makes it imperative to own a system that is able to collate these records so you’ll be able to see how well you’re doing over a number of trades, thus eliminating the need to be trapped on individual positions.

Trading journals can be viewed as an ongoing and reasonable reminder that your trading performance is measured over a number of positions entered. Having this behind your mind is crucial, especially when starting off your career in trading, as it aids you remain disciplined, as well as eliminate any emotion that you might tie to any particular trade.

If you succeed on having a forex trade journal for a few months, you’ll begin to notice the emergence of patterns in your trades. You’ll see such patterns in your winning trades as well as those that ended up in the red. A trading journal allows you define your trading route, as it gives you a clue into whether you’re trading out of boredom or whether you’re doing so with a strong logical reasoning. These and many more intents would be revealed by your trading journal.

Forex traders often times find themselves meshed in a lot of mistakes during their budding stages. One true way of eliminating such mistakes is to find what basically lead to such mistakes, and deal with them promptly. This you can do if you keep a forex trading journal.

Asides having a good trade journal measure your live trading data, it should be designed to also offer information on the plans for each trade. This is a technique that allows you to critically analyze every position before being initiated, how much risk that can be accommodated on each position entered, where your take profit will be place, stop loss levels and how positions can be managed going forward. The journal translates into your trading thought process, and it makes it possible to translate thoughts into reality. It actually creates a methodology where you can plan your trade, and trade your plan

A trading journal is able to put together your statistics, which in turn sets up a trading plan by recognizing the various parameters of action required, offering a flashback so that you’ll be able to gauge how well a position was entered, and primarily serves as a feedback mechanism that allows you create and enhance your trading skills. The forex trading journal is an indispensable tool for any successful trader.

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