One of the best and least talked about ways to become a better Forex trader is to keep a Forex trading journal. Some may not feel it is necessary since you’ll always have your online account statements at your fingertips. I beg to differ, as keeping a Forex trading journal is much more than just recording your trades.
Many successful traders have found that by keeping a “complete” trading journal they get a better picture of what trading was like on any one particular trading day. For instance, if you look on your account statement and see a loss when your trading system should have shown a winning trade you are more or less left in the dark. Perhaps you had a power outage before you are able to correctly place your trailing stop and the end result was that you took the loss rather than having a winning trade or breakeven trade. You see, with the right type of notes you would’ve known that your trading system was interpreting the price action correctly. It was the rare power outage which was the culprit and the cause of the losing trade in this case.
It’s also a good idea to jot down news events happening during your trade. This type of information can be useful when seeking a correlation between certain types of economic and financial news and market movement and volatility.
Another often missed piece of information to jot down is your emotional and physical state. If you were sick on a particular day this may influence your level of discipline and thusly influence your ability to follow your Forex trading system to the letter. It is typically so much easier to slip up and take shrotcuts when you are not feeling well.
An additional good idea is to write down any mistakes you might make. For instance, you may accidentally click on the buy button in your online trading platform rather than the sell button you intended to click. If you only have your account statement to rely on them they simply see an extra trade that does not correspond with your system. The extra trade was simply you closing out the trade made by mistake, after which you placed the correct trade. With your journal you will quickly be able to see the reason behind the trading day’s outcome because you’ll see that a trade was made by mistake and that trade needed to be exited immediately.
We just covered a few ideas for you to jot down your Forex trading journal. You should feel free to write down anything you think is important to give you the most complete picture of what your trading day was really like.
