A trading journal is what keeps you on the ground.
Are you on a winning streak? Log what went right in your trade to develop your strategy further. A drawdown? Read through your journal and see what went wrong to improve your next trade.
It's like the holy scripture that guides you on what's right and wrong. Are you still skeptical about using a trading journal? Explore the five ultimate reasons why a trading journal is important.
When you journal your trading experience, you basically log everything about your trade, including:
With these entries in your journal, you can easily assess how you and your trade perform in the forex market.
Did your position keep up with the market movement? Did you keep your emotions in check throughout the trade?
It lets you see a bigger and better picture of what happens to your trade because you're looking at it outside the heat of the battle – where your emotions could cloud your judgment.
You have a reference to what happens to your trade outside the heat of the battle.
It points out your mistakes and tells you what went well so you can better strategize your next trade.
There's no definite way to trade forex and to profit from it. It's possible what went well on the last trade drags your trade down today.
This makes a lot of beginner traders stuck on a fence – they don't know what really works for their trades.
But with consistent journaling, you will see the common denominator behind your losses. It can be the tiniest thing you let roam around your decision-making process that causes your losses.
More than that, you'll draw a better picture of your strength that you can hone and maximize in the future.
Unconscious biases block you from seeing things the way they really are. They make you see what you only want to see.
The moment these emotions create unconscious biases, you'll find it difficult to see what happened to the trade, especially what went wrong with it.
However, journaling every necessary aspect of your trade makes it easier for you to track what works and what went wrong. This includes your risk management, your entry and exit points, the volume of your trade, and many, lots more.
Ultimately, this helps you make better and more informed trading decisions in the future.
When you execute a trade to the market, you enter a heated battlefield between you, other individual traders, and the market itself! During this period, traders often lost sight of their goals.
When you journal your trade, you'll see if your trade follows the overall trading plan. Otherwise, you can see the trigger that makes you stray away from your plan.
Trading journal also records and quantifies the impact of out-of-system trades. Having this eye-opening reference helps you become more cautious about adhering to your trading plan.
Profiting in forex trading is a work in progress. Additionally, you'll experience the seemingly endless learning curve.
There's a big chance of you being lost, unprofitable, and even losing when you started trading. It's an unfortunate fact.
This makes most beginner traders demotivated in forex trading. They don't know if the investment will give them the financial security that they want or if it's just another sunk cost fallacy.
With a trading journal, you'll see how much you've grown from where you started. It may sound sentimental, but I'm pretty sure that your past self didn't imagine you're where you are right now.
A little mishap on your journey? That's normal! As long as you keep a trading journal to yourself, you have the ultimate guide to help you surpass that little bump.
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