As a globally interconnected, 24/5 digital trading market, taking it back to basics with a pen and a piece of paper could well be one of the most effective forex secrets there is. Why? Well, today, we’ll be answering exactly that – detailing 3 reasons you should be keeping a trading journal, regardless of your experience or ability on the forex market.
Review your trades in one convenient place
Your trading journal should primarily serve as a place to document the details and statuses of all of your trades. As such, documenting your trade history enables you to effectively review your trades to obtain a better understanding of your strategy and trends.
At the very least, you should be reviewing your trades with the following factors at the forefront of your evaluations:
- Entry and exit day
- Entry and exit price
- Profit or loss
- Strategy used
The most effective way to learn forex trading is to have a thorough understanding of what works for you. As a result, reviewing your own trades is a great learning tool as it focuses on firsthand experiences, enabling you to better comprehend successes and failures.
It’s a great learning opportunity
With that in mind, perhaps the most important reason to keep a trading journal is that it provides you with a great opportunity to learn and grow – making a trading journal an essential forex trading tool for beginners.
As aforementioned, when reviewing your trades you should be able to accurately identify where things went wrong (or right!). Utilise these findings as learning tools to better inform your strategy moving forward, ensuring you don’t make the same mistakes twice. This applies to both the forex novice and expert alike – no matter how long you’ve been trading, there’s always something to learn when it comes to forex!
Everything in one place
From those all-important dates on the forex calendar to the status of multiple open trades, you can quickly become inundated with all things forex. Keeping a trading journal is a very effective way of combating this, keeping everything relating to your trades in one convenient place.
Amidst a volatile market environment, stress levels can understandably rise at a rapid rate. Consequently, keeping a trade journal is a great way to provide a little welcome relief by ensuring you’re on top of everything at all points in the process.
What’s more, by having all the relevant information on your trades kept in one place, you increase your ability to act reactively to sudden market changes. In the world of forex, timing often makes all the difference, so being able to seek information quickly may help to turn losses into profits.
It’s easy to see why keeping a trading journal is so valuable. With that in mind, ensure you have all the fundamental market knowledge to effectively utilise yours by signing up to our free industry seminar right here.