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The Importance of Forex Trading Journal
Written by: PaxForex analytics dept - Saturday, 01 October 2016 2 comments
In the field of active trading, information is a valuable commodity. A trader is well-advised to acknowledge those words and learn as much as possible from his or her trading history. That said, past performance is not indicative of future results. One of the ways in which a trader can learn from past success and failure is through keeping a trading journal. Trading journal is a comprehensive record of data exclusively related to a trader’s performance over a period of time.
Keeping track of past successes and failures is important for a trader of any proficiency. Whether you are a novice just getting started in your trading career, or a seasoned pro in the market going back and reviewing past trades allows us to work out the details of any profitable trading plan. One of the easiest ways to record your trades is through keeping and maintaining a trading journal throughout the trading week. This may be a difficult task at first but consistency is important, and can be made easier by having a premade trading journal to log.
Trading logbooks appear to be handy, particularly after you’ve begun experiencing negative trading results, which lead to demoralization. Sometimes, you might not be able to find a clear reason for the poor results, which is when you need to refer to your journal. Answering questions such as “Is my trading system still
working?” or “Should I continue trading the same way despite my recent losses?” would be a lot easier, if you could take a look at your previous trading sessions.
A complete trading journal not only contains the pertinent trade details, such as entry and exit prices or the number of pips gained or lost, but it should also indicate notes on your trade decisions. This covers trading psychology details such as your confidence in taking the trade setup, your reaction to expected and unexpected market events, your decisions midway through the trade and the rationale for those. By keeping track of these, you can gain better insight on how your emotions and mindset are influencing your trading performance.
Creating and meticulously maintaining a forex trading journal is the quickest and most effective way to develop into a disciplined and profitable forex trader. Having this tangible piece of evidence to explicitly show you how discipline and patience pay off over time, is a critical element to attaining and maintaining the proper forex trading mindset. The reality of forex trading is that at some point on your journey of learning how to trade, you absolutely have to figure out a way to become a disciplined and organized trader, otherwise you simply will not become successful in the markets.