In 2016, Nial won the Million Dollar Trader Competition. In last week’s article I discussed what a typical day in the life of a professional Forex trader is like. I am going to first explain to you why having a Forex trading journal is essential to becoming a professional trader, and then I am going to show you what my trading journal looks like so that you get an idea of how to make your own. If Your Impatient and Can’t wait to the end of this article.
I Track All My Trades Using This Spreadsheet. Pay it forward and share it around with other traders. Why do I need a Forex trading journal Nial? First off, you need a trading journal because you need to track your trading performance over time.
Next, developing a track record is something you should take pride and pleasure in doing. If you have a tangible track record that shows your ability to be consistent and disciplined over time, you won’t want to mess up this display of mental strength by committing emotional or stupid trading mistakes. Finally, as we discussed in last week’s article about a day in the life of a pro trader, your trading should be a routine. Creating and maintaining a trading journal gives you the structure required to build your trading routine on and it also helps you examine and focus on each individual element of a trade, which we will discuss below. What should my trading journal include and how do I make one?
The images below are actual screen shots of my trading journal. I took, although it was a good price trading action setup. If the order never gets filled just delete it from you journal. If you are unsure which currency pairs are best to trade, check out this article: best Forex currency pairs to trade? Planned Stop and Planned Target: You will put your pre-determined stop and target price in these boxes. It’s very important to pre-define your stop level and target level. Risk: How much money can you lose on the trade?
Reward: How much money are you aiming to make on the trade? To learn more about position size click here: Forex position sizing. Exit Price: What price did you actually exit the trade at? To learn about exiting trades click here: Know When to Hold em, Know When to Fold em. How many pips you gained or lost on the trade.
L: How much total money you made or lost on the trade. Planned R:R : What was the pre-defined risk reward ratio of the trade? Actual R:R : What did the risk reward ratio actually end up being? This is important, if you aren’t achieving a risk reward of 1:2 or greater on your winning trades, you will see that over time it’s very hard to make money in the markets. Also, you will notice that if you take profits prematurely this greatly lowers your risk : reward ratio, and of course if you take a risk that is larger than what you had planned the same thing happens.