Forex trading experts achieved success in this endeavor by making use of a complete trading journal. Aside from keeping track of your ideas and profits, you should also monitor your risk management decisions and manage your emotions by including these in your trade journal. These components make a trading journal complete and useful:
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 next major component is on the time frame you will keep your orders in or your trade open. For day traders, this can be anywhere from a few minutes to a number of trading sessions. For swing traders, this can be somewhere around a few days to a number of weeks. This all depends on your trading personality and the type of trades that you usually take.
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.
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 next major component is on the time frame you will keep your orders in or your trade open. For day traders, this can be anywhere from a few minutes to a number of trading sessions. For swing traders, this can be somewhere around a few days to a number of weeks. This all depends on your trading personality and the type of trades that you usually take.
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.
About the Author:
Learn more about forex trading. Stop by Airin Haynes' site where you can find out all about forex strategy and what it can do for you.
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