Major contents of a Forex trading journal include the whole process of Trading. This includes not just entries and exits but also your emotions in the process.
Tracking your trade record gives you the ability to trade consistently and with discipline over time.
This will give you motivation, increase your confidence and protect you from emotional mistakes
Like we mentioned before, a trading journal works to keep you accountable, you need something to be accountable to as you trade.
In this lesson, we shall mainly concentrate on the major contents of forex trading journal.
What to include in your Forex trading Journal
1. Trade details
Here, I am using my trading journal snapshot below as an illustration;
Entry Date & Time: This is self-explanatory; the date and time you took the trade. Each journal entry should include the date and time when a trade was taken.
Symbol /FX pair: The particular security traded. It can either be a currency pair or commodities. For example, Gold, Silver, oil or diary products for most of us. Also indicate the time frame you are trading on.
Market Order (Buy/Sell): Under the market order, you record if you bought or sold and also record your exact entry price
Lot size: Your position size on the trade, or the number of micro / mini / standard lots traded
Stop loss level & Possible $ risk.Take Profit: Here you fill in your stop loss price level and the dollar amount at risk i.e the amount you could lose on this particular trade
Take profit level & Possible $ profits: Fill in your profit target price level and the amount you could profit on this particular trade.
Risk:Reward: Write your predefined risk reward. To grow your account steadily you must only take trades with at least 1:2 risk reward ratio
Realized Profit/Loss: This is the amount you record when a trade close.
Strategy/setup: Also record the setup of your strategy you trade on market chart i.e the signal for entry
Trade management/remarks: Show how you managed your open trade. For example, trailing stops, closing out the trades manually ( in this case, you must give reasons why), hitting stop loss or take profit levels etc.
2. Trading emotions
Under your trading emotions section, include how you felt before, during and after closing a trade.
Before taking a trade
- Are you comfortable with your decision or you still have doubts?
- Do you feel you missed anything in your analysis?
- Are you confident with your decision to take that trade?
During your trading time on an open trade
- Do you regret that you took that trade?
- Were there any changes that you should’ve adjusted to?
- Did you panic when price first moved too quickly opposite your prediction?
- What was your reaction when there was news release, did you close your trade in panic or you let it run?
- How often did you monitor the trade before closing?
- Did you attempt to make any changes in your trade, for example set a new stop, target or close trade
After closing a trade
- Do you wish you hadn’t taken that trade?
- Were you happy or not with your trade idea and decisions
- Do you feel you should make changes in your next trade setups.
3. Decision-making process before, during and after trading
Before taking the trade/entry
- Are you following your trading rules and strategy?
- What are over all market conditions?
- Take a picture of your trading set up on the chart/Screenshot immediately after entry
While your trade is open,
- What happened with the market from the time you opened the trade to the time that you closed the trade?
- Were you able to cut losses just in time?
- Was there an unforeseen event that you were able to adapt quickly to?
After closing trade,
- Did you follow your trading plan?
- Did the trade go as expected or not?
- Do you think you should revise your trading setup?
- Reasons why you exited the trade
- Trading mistakes and missed opportunities
- Attach a screenshot of your trade after closing. Do the same in case a trade becomes a failed trade
4. A list of the upcoming news events
This is one of the major contents of forex trading journal.
Traders mostly concentrate on news from the U.S. economy. You should know the news that move the market and concentrate mostly on that.
This will help you know what to watch out for, if you’re going to keep your trade open during news release. FIY, News can actually blow your trading account when on a wrong side.
You can also identify opportunities in which you can add to your position and maximize your profit potential.
Some of the news events you must consider, Central bank Interest rate decision, inflation and employment news.
As your trading journal progresses over a series of trades, you will start to see the significance of it more clearly. This will give you a picture of how you are doing and the system.
Basing on that, you will be able to identify areas of your weakness that need to be improved or dropped for better results.
This is the most efficient and quickest way to become a profitable trader!
How long should you hold an Open Position ?
How long you can hold an open position in forex, is a personal thing for all traders. The decision is all yours. You know what your goals are as a trader, the kind of strategy you use to trade. All this starts from what you are? and What you want? If I am to answer,...
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