Seasoned forex traders are likely to attribute part of their success to keeping a complete trading journal. This should be able to help you keep track of your progress, as well as the trade setups that usually work for you. Aside from that, it should also contain risk management decisions and psychological factors that affected your trade. Below are the components of a good trading journal:
The first major component is the actual trade analysis. This can be in the form of technical signals or fundamental framework, depending on which ones you typically include in coming up with a trade idea. It would be helpful to look at all possible angles, which might also include risk sentiment, in your analysis. This will allow you to explain why you believe a currency will rally or sell off versus the other.
Next is the part on risk management. When you've finished identifying why a currency pair will move a certain way, you should also be open to idea that your analysis will be proven wrong. In this case, you should have clear risk management plans in place in order to limit potential losses. This part should explain if you will be cutting losses early or at which point your trade idea is invalidated. You should also mention how much you are risking on the trade as a percentage of your account.
After this, you should discuss the time frame of your trade. This part will specify how many minutes, hours, or days you will be keeping your trade open or orders in. Of course this depends on what trading style you practice. Day traders typically mention until which trading session they will hold on to their trade while swing traders specify how many days or weeks they will keep it open and which market factors could lead to an early exit.
Lastly, you should include some trading psychology updates that can help you manage your emotions while your trade is open. Feel free to note if you are feeling confident or nervous about your trade setup, and if you feel angry or regretful if you didn't make the correct trading decision.
The first major component is the actual trade analysis. This can be in the form of technical signals or fundamental framework, depending on which ones you typically include in coming up with a trade idea. It would be helpful to look at all possible angles, which might also include risk sentiment, in your analysis. This will allow you to explain why you believe a currency will rally or sell off versus the other.
Next is the part on risk management. When you've finished identifying why a currency pair will move a certain way, you should also be open to idea that your analysis will be proven wrong. In this case, you should have clear risk management plans in place in order to limit potential losses. This part should explain if you will be cutting losses early or at which point your trade idea is invalidated. You should also mention how much you are risking on the trade as a percentage of your account.
After this, you should discuss the time frame of your trade. This part will specify how many minutes, hours, or days you will be keeping your trade open or orders in. Of course this depends on what trading style you practice. Day traders typically mention until which trading session they will hold on to their trade while swing traders specify how many days or weeks they will keep it open and which market factors could lead to an early exit.
Lastly, you should include some trading psychology updates that can help you manage your emotions while your trade is open. Feel free to note if you are feeling confident or nervous about your trade setup, and if you feel angry or regretful if you didn't make the correct trading decision.
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