What may be found on this page?
- EXCELLENT FOREX TRADING JOURNAL
- APPROACHES TO JOURNALING FROM THE PERSPECTIVE OF EXPERT ANALYSTS
- HOW TO DETERMINE THE BEST JOURNALING APPROACH FOR YOUR NEEDS
A record of your transactions is known as a forex trading diary, and keeping one may help you improve your trading techniques by drawing on what you’ve learned from prior encounters. A trader has to maintain tabs on their closed positions just as much as a company owner needs to monitor their inventory levels.
Even though it could be challenging at first, maintaining a trading notebook and tracking your transactions is essential since it can help you answer essential questions regarding your trading strategies. Trading more consistently, being held more responsible, and generally improving your skills are all potential benefits of doing so. In this article, we will discuss the essential information that you need about journaling, and we will provide the following:
- A template for keeping a Forex trading diary in Excel
- Advice on how to choose which journaling approach is right for you
- Advice on the most efficient process for trading forex.
EXCELLENT FOREX TRADING JOURNAL
The following image is a screenshot of a Forex trading logbook template.
Your forex trading journal might contain information such as the currency pair traded, the size of the trade, whether your position is long or short, the date of the trade, your conviction level, whether you’ve used a fundamental or technical strategy, the reward-to-risk ratio, points movement, and whether or not the trade was booming. This is similar to the information included in the example of a forex trading journal in Excel that was presented earlier.
You could also provide other information, such as the entry price, stop price, and limit price, in addition to the number of exchanged lots, The more information you save, the simpler it will be to look back on your previous transactions at a later time.
In addition to this, make sure that there is room in your diary for you to write notes, Traders that employ numerous entry approaches will want to keep track of various information, including chart time frames, indicators used, market circumstances (range, trend, breakout), and anything else that plays a role in making a trading choice.
With the passage of time and the use of diaries such as the one shown above, the trader can recognize the features of thriving or failing deals.
APPROACHES TO JOURNALING FROM THE PERSPECTIVE OF EXPERT ANALYSTS
Currency Strategist with Years of Experience, Tyler Yell
Since 2008, Tyler has been active in the trading industry, specializing in foreign exchange, options, exchange-traded funds, and commodity futures.
The entries in Tyler’s trading notebook are often relatively brief and contain the following information:
- A discussion of the risk management and position size techniques that were used
- The fundamental environment includes its trending or rangebound nature and volatility indicators.
In addition, he remarks on why an entry order needs to be made and a stop order ought to be set at the point where an equity decline is reduced and his technical opinion shifts.
He continues by saying, “I frequently reduce the size of my trades so that I can remain in the market for a longer period of time or until the technical bias is not justified.”The purpose of the follow-up is to ascertain which types of currency combinations are reacting favorably to the currently employed strategy.
The Currency Strategist of DailyFX, James Stanley
James has been involved in the financial markets since 1999 and primarily trades forex, equities indexes, and exchange-traded funds (ETFs).
Instead of keeping a diary, James maintains a ledger, He makes an effort to update it once every week with deals made since the last update, To enable apples-to-apples comparisons, he explains, “I keep everything in percentage format, from equities to options to FX.
‘As I’m filling this in, I can notice patterns as they happen(ed), mostly by concentrating on P&L, and if anything is awry, I’ll generally simply think about it for a day or two while I come up with some type of a solution,’ the author of the passage says.
Concerning the factors that should be considered to make improvements during drawdowns, James thinks about whether he wants to be aggressive or cautious, “If I hit a bad streak, the answer is typically just pulling back on the throttle, playing smaller sizes, using less leverage, and entering fewer but more selective games.”
“Being overly cautious is the polar opposite of that, and I can usually catch that as it’s happening, so I don’t usually have to encourage myself to get more aggressive.”
This snippet of insight into our analysts’ journaling and trading routines could or might not connect with your processes, There is no one strategy that is certain to work, but you may choose from the variety of options that are provided here.
HOW TO DETERMINE THE BEST JOURNALING APPROACH FOR YOUR NEEDS
Finding the way to journal that works best for you will need trial and error, and there are a few different strategies, You can keep your trade diary secret and review it on your own, or you may make it available to other traders and ask for their opinions on what they see, Both of these approaches are useful and will assist you in being responsible.
If you decide to maintain a personal diary, the best way to organize your ideas and screenshots is in a Microsoft Word document, Still, an actual notebook might also work if you want to scribble down your thoughts.
It would be best to record your conversations and ideas on an internet blog or forum to make your diary accessible to the public, Because of this, traders from all around the globe will be able to watch whether your transactions win, lose, or end in a tie.
This not only provides you with an additional motivation to post explicit and legitimate transactions on your account, but it also makes it more difficult for you to stray from your plan, You may examine your diary alone or enable other people to review it online.
In the back of your mind, you will be aware that you will eventually have to confront your choices later on in your diary, and depending on whether or not your journal is public, you may have to confront others as well, This will help you become more conscious of the moments when you allow your emotions rather than the logic of your strategy to dictate your choices, as well as the times when you decide to “get creative” and place a rogue trade without a clear foundation for it.
It is beneficial to have someone to answer to, Many traders can deceive themselves into believing that they are acting logically while making trading choices, only to discover that they did not follow their plan.
JOURNALING AND YOUR TRADING WORKFLOW ARE TWO TOP TIPS FOR FOREIGN EXCHANGE TRADING
A trader’s workflow should consist of a mix of scanning the charts and evaluating the news, initiating and managing trades, and documenting the transaction at the process’s conclusion (and potentially the beginning).
Examine the charts
Examine the opportunities now presented by the market, whether this involves recognizing patterns on a technical chart or acting on fundamental variables such as news releases, At this stage, consider keeping a log of the probable currency pairings to trade and your reasoning for picking those pairs.
Discover a window of opportunity
Find an entry, put a mark on your chart, and then write a comment about why the entry was made.
Enter the Market
After placing the trade, you can add your profit objectives and start taking profits, Likely, you won’t have time to keep a diary at this stage since you’ll be so busy with the transaction.
Control the Market
At this time, trade management could include pyramiding, also known as multiple profit objectives, Because managing the deal needs your complete concentration, you may only be able to document it via screenshots.
Review and Record the Business Transactions
Now that the transaction has been completed, you may begin journaling, analyzing your screenshots, and reviewing any notes you took to evaluate the trades, determine where you could have gone wrong, and think about what you need to do to do better.
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