Learn Why You Need A Forex Journal for Your Trades. Not having a journal as a trader is the equivalent to not having a P&L report as a business owner. It is like being a sports team, and not keeping score of the games you play or your wins and losses. That sounds totally wacky, right? Well, it is! And the vast majority of traders set themselves up for failure every day by either not having a journal or not using it properly. I am here to tell you that you can change all of that today, with just a few simple steps.
Why You Need A Forex Journal: STEP 1
Creating a Forex journal is to have before and after screenshots of every trade you ever take. You should be trading an exact strategy and plan if you are a serious trader. If you need help developing a plan- then check out this video I made on How to Build a Forex Trading Plan.
Since you are following an exact plan, you want to ensure that your journal lists all the reasons for taking the trade. I would recommend you document before and after shots of all the time frames you analyze for each trade you enter. Look at the images below to get an idea of how I document my before and after screenshots:
Aside from the screenshots of the setup, I have a detailed explanation of all the reasoning behind what has triggered my trade and how I managed it and Why You Need A Forex Journal. Having this documentation in your journal is extremely important and critical to your success. Documenting all your trades allows you to go back and analyze your performance. This is the absolute only way to improve as a trader and a key reason Why You Need A Forex Journal. Without being able to have documented performance to go back and analyze, how will you know what you are doing right and what you are doing wrong? There is no way to improve and grow in anything in life if we don’t know how we are performing. Therefore, it is essential that you not only keep a very well documented journal, but you revisit it and study your trades every single day, week and month.
Why You Need A Forex Journal: Step 2
in creating a Forex journal is to document and note down all your emotional feelings and perceptions of the market before, during and after each trade. This is something most traders leave out and never think to do in the first place. Emotions are a big reason of Why You Need A Forex Journal. However, your emotions and discipline will be the most difficult aspect of your trading to control. Documenting your emotions and reactions will be key to evolving as a trader and identifying your strengths and weaknesses. Having a journal, you can refer to gives you the opportunity to analyze yourself and your actions, to determine what you need to improve on. For example, let’s say you journaled the last 10 trades and realized you closed out your position before hitting your full take profit on 3 of those trades. Now you look back at your journal and see you closed them out because you feared the trade reversing on you and taking back your profits. BUT, if you never would have closed out early, your full take profits would have been hit and you would have made 75 more pips in that block of trades. That is very critical information to your success and with a slight tweak to your actions, you could be a profitable trader.
Why You Need A Forex Journal: Step 3
Creating a Forex journal is to track the progression of your goals and risks according to your trading plan. You should have very clear goals every day and every week, and your journal can help you keep track of them and accomplish them. Your goals and risk parameters should be clearly defined in your plan, and your journal is how you can track them and ensure you follow and accomplish them. For example, if you have a goal to achieve 200 pips a month- your journal should be how you track your trades and performance to see where you stand with your goal. This is extremely important and overlooked by most traders I have ever met.
If you follow these steps to developing and analyzing your trading, I promise you will see a dramatic improvement in your results. Discipline and consistency in your journaling are extremely important to your success. Just journaling is not enough, you must be analyzing your journal constantly for it to have any effect. Although it can be tedious and boring, it is essential if you ever want to succeed in this profession.
For more information on exactly how to develop a trading plan and journal, check out my full trading course by clicking the link below. It is loaded with over 30 lessons and 50 videos covering everything you need to know to become a professional trader. Thank you very much for taking the time to read this and I truly hope you found value in it!
Take our Full Forex Online Training Course today and start trading with knowledge. Now you know Why You Need A Forex Journal for ultimate success.