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:
First is the actual trade analysis itself. While some traders prefer either pure technical or pure fundamental analysis, you can opt to include both in your trade plan and even combine market sentiment analysis. Covering all the bases could improve your probability of winning after all. This part should have an explanation on why you predict the currencies will rally or drop.
The second part is all about risk management. After listing the reasons why you think a pair is bullish or bearish, you should then come up with a contingency plan in case your idea is wrong. This part should contain details on how much you are risking per trade and at what point will your analysis be proven wrong. Your exit plan should be made clear here.
The third part is all about the time frame. How long do you plan to hold on to your trade? This can depend on the type of trading style you have. If you're a day trader, you should specify until what trading session you plan to keep your trade open or if you will have any reason to close early. If you're a swing trader, you can determine how many days or weeks you plan to keep your trade open or if there are any market changes that could lead you to exit before that time frame.
The last part is all about trading psychology. This doesn't necessarily have to be included on the moment you come up with a trade idea but it can be in the form of updates along the way. You can mention how confident you are in your trade position or if you are feeling uncertain. You can also list emotions such as regret or anger if you didn't play the trade so well. This can help you manage your emotions along the way.
First is the actual trade analysis itself. While some traders prefer either pure technical or pure fundamental analysis, you can opt to include both in your trade plan and even combine market sentiment analysis. Covering all the bases could improve your probability of winning after all. This part should have an explanation on why you predict the currencies will rally or drop.
The second part is all about risk management. After listing the reasons why you think a pair is bullish or bearish, you should then come up with a contingency plan in case your idea is wrong. This part should contain details on how much you are risking per trade and at what point will your analysis be proven wrong. Your exit plan should be made clear here.
The third part is all about the time frame. How long do you plan to hold on to your trade? This can depend on the type of trading style you have. If you're a day trader, you should specify until what trading session you plan to keep your trade open or if you will have any reason to close early. If you're a swing trader, you can determine how many days or weeks you plan to keep your trade open or if there are any market changes that could lead you to exit before that time frame.
The last part is all about trading psychology. This doesn't necessarily have to be included on the moment you come up with a trade idea but it can be in the form of updates along the way. You can mention how confident you are in your trade position or if you are feeling uncertain. You can also list emotions such as regret or anger if you didn't play the trade so well. This can help you manage your emotions along the way.
About the Author:
Looking to find the best deal on forex trading, then visit us online to find the best advice on forex strategy for you.
No comments:
Post a Comment