Throughout your trading career you will meet many other traders, some of whom will scoff at the requirement to keep a trading journal (trading log).
You can guarantee they are the ones who will drop off the Forex forums and groups or proclaim that they are no longer trading (often pretending that they have reached their financial goals and no longer need to trade… yeah right.)
Why Trading Journal is Important to Your Success in Forex?
First of all, why do traders fail to keep one? – Well that is obvious, it requires a little bit of discipline.
If traders are not even disciplined enough to write a few words on a spreadsheet – how on earth are they going to remain disciplined to exit a trade when it is flying, or stick to their exit rules? And they wonder why they fail…
It also requires that you actually pay attention to your trading – not just to your winners, but also to your losers. It means that you have to admit when you were wrong, admit the losing trades and actually committing them to history in a log. That sucks, but it is part of learning, and ultimately, to trading.
The fact that I insist that you analyse every trade, and your day overall, keeps you honest through the bad and the good. It allows you to see your progress in a mechanical and methodical unbiased manner – as long as you fill it in honestly. You can quickly see where your weak points are, learn over time how to fix them and gradually transform into a superstar trader.
Keeping A Trading Journal Is Hard But It’s Worth It
By keeping a trading journal, you can improve your Forex trading strategy and find your edge in the markets.
It is the best way to:
- See if you are over trading
- See what you are doing wrong
- See what you are doing right
- See if you are too scared to trade (under trading)
- Analyse what time of the day works best for you and your strategy
- See what Forex pairs perform best for you and your strategy
- See what Forex trading strategy works best for your personality
- See if you are being too aggressive, risking too much
- See if you are being too passive, risking too little
- And much, much more.
Without a trading journal you are just gambling.
A trading journal allows you to be statistical and helps you to use the power of probability in your trading – and not just trading on emotions or a whim.
Keeping your trading journal up to date gives you feedback on your trading, it will help you make less mistakes, meaning that you lose less money, therefore meaning you make more money in Forex.
Trading is a pretty steep learning curve, you need to do everything you can to help yourself and keeping a trading journal up to date is just one of many tools in your toolbox. The more detailed the log the better, just don’t spend 8 hours a day updating it and only 2 hours looking at the charts!
If You Want to Become a Successful Forex Trader, You Must Join AndyW Club.