5 Critical Components Of A Trading Journal
what is captured in the trading journal
The journal has no limitations, you can capture every detail and every aspect of your trading routines, you can enter all you performance statistics how you are doing in terms of numbers normally the numbers they do not lie. You can also include your own observations of each market how it is behaving, the trading mistakes you have made and how it has costed your trading plan. It will help you find your own unique method and style.
- The general market conditions of the trading day, the volatility of the market and the general trend
- Why you entered the trade, the time you entered the trade, and the price you entered the trade.
- Major reasons why you entered, exited a trade and the time you executed the trades.
- Your risk management and how you applied it
- What happened with the market from the time you opened the trade to the time that you closed the trade.
- was the trade a swing trade or a short trade
- Your strength and weaknesses during the trades in their different varieties
5 elements of a forex trading journal:
Potential trading area
The potential trade area is where you believe you will have an edge or advantage that you trade with a high probability of success, and that reward/risk ratio is in your favor. You must determine, for yourself, how you want to meet this requirement.
Once you are in the potential trading area your entry trigger will tell you when exactly to execute the trade, its an entry technique that you will be using, a good entry technique provides you with a solid confirmations that will avoid you to make any losses.
A standard lot represents 100,000 units of any currency, whereas a mini-lot represents 10,000 and a micro-lot represents 1,000 units of any currency. A one-pip movement for a standard lot corresponds with a $10 change. when you are trading synthetic indices the lots are micro standard as well as average.
Trade management rules
These are the rules mainly do’s and dont’s that you will be following in your trading experience , some of the rules are
- When Forex moves, you move.
- Less emotions, more logic.
- Never risk more than 3.2% per trade
This is basically how well did your trading work out , how you managed it and any improvements that is needed.