To find out the weak points in their Forex trading, experts keep a trading journal so that they can strengthen their trading style and increase the consistency with which they earn profit. The journal helps them hold themselves accountable and makes it easier choose the best option among thousands of indicators, so that they can analyze their activities as a historical reference later. Today, we will discuss with you how you can keep a trading journal for you that can be simple with effective results, and these guidelines or rules mainly help a new trader to keep his strategies updated with the risk management system and latest practice with executing options trading.
A journal or diary helps a trader to write his action plans based on a log or record of the previous purchasing of financial instruments. Using this log, one can visualize clearly where improvement is needed and how he can achieve success by implementing those strategies into actions. This is a proven method of record-keeping where one should use pen and paper for the perfect results.
The smart traders at Saxo capital markets always maintain their trading journal. They know it is the only effective way to track their progress. Once you start following in the footstep of the smart traders, it will be easy to boost your skills.
How to create a journal
To create a journal for managing the trades, beginners in the United Kingdom do not have too much trouble, because it is a simple process where they can tailor their unnecessary activities during the trading operation. To create this, at first, an investor need a spreadsheet or a book, but according to experts, one should use a spreadsheet so that he or she can note down their activities regarding our startup there according to dates.
Newbies have to identify the information that they want to include and write the heading such as position size, date of the trade, or the underlying asset. Should you start recording the drawing of the financial instruments after placing the take to fit order and the stop-loss order? Later, you should compile all the data based on days, weeks and months so that you can get the necessary information whenever you need it later. You can also include the characteristics below to get a proper picture of your progress.
Reasons for a trade
At the beginning of the log, you should write down the objective of this log and why you are conducting your trading in the Forex market. You should keep this box for each trade as it may help you to determine which strategy works best for you based on your fundamental and technical analysis. To mind the information from different indicators, you need to use a combination of fundamental and technical analysis because without proper logical planning, achieving success is nearly impossible.
This is all about your feelings about buying the financial instruments, and based on your technical pattern, this conviction may be high, medium, or low. This can help you by determining whether you should trade or not in a certain period.
A few experts keep this place in the journal, which helps them to evaluate their psychological balance during the execution of a specific type of trading operation. An investor should identify their mindset when buying a financial instrument in the support level and selling it at the resistance level so that they can make a higher profit based on the logical decision.
Therefore, it is clear that having a trading journal supports an investor to test out different strategies based on the timeframe, and he or she can choose the right action plan among the various types of activities so that he can make his trading mistakes. So, the importance of keeping a trading log cannot be explained until a trader tries to keep one in their practical life.