A Forex Trading Journal to Track Your Performance

learntotradethemarket.com/forex-trading-tools/a-forex-trading-journal-to-track-your-trading-performance

Nial Fuller, Nial 6 de mayo de

Fuller 2011

Creating and maintaining a Forex

trading journal is one of the most
important pieces of the puzzle of
professional Forex trading. In today’s
lesson, I am going to give you a trading
journal to log all your trades. I
guarantee this will help your trading
and mindset.

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. By the end of this
article you will be able to create your very own Forex trading journal, and this is a huge
step in the direction of becoming a professional trader.

If Your Impatient and Can’t wait to the end of this article. You can download my Forex
Trading Journal here – I Track All My Trades Using This Spreadsheet. Please Make a
comment after reading this article and Click The Facebook ‘Like Button”, 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. Many aspiring traders get caught up on the results of each individual trade;
however, the professional trader knows that their trading performance is measured over
a long series of trades, not just one or two. So, it’s important to have a way to track your
results so that you can see how you are doing over a series of trades, this allows you to
not get caught up on any individual trade. You can think of your trading journal as a
constant and tangible reminder that your trading performance is measured over a series
of trades. Having this type of reminder is very important, especially early-on in your
trading career, it helps keep you focused and it helps to remove any emotion you might
attach to any one trade.

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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. In this way, a trading journal works
to keep you accountable, you need something to be accountable to as you trade, because
there is no boss looking over your shoulder threatening to fire you if you don’t do XYZ
exactly right. If you don’t have a lot of money to trade with, creating a track record that
shows consistent trading results over a long period of time is proof that you CAN trade,
and if you have this proof you can find people to fund you. So, as we can now see,
creating and maintaining a Forex trading journal is a key element to any effective Forex
trading plan.

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. Essentially,
Forex trading success is the result of doing a lot of things the right way every time you
interact with the market, and a Forex trading journal helps you do everything the right
way every time you trade.

What should my trading journal include and how do I make one?

The images below are actual screen shots of my trading journal. I have entered example
trade parameters below each heading just for demonstration purposes; it wasn’t an
actual trade that I took, although it was a good price trading action setup. However, this
is the same trading journal I use; you can use it too if you like, or tweak it to your
desire.

– Entry date: This is self-explanatory; the date you entered the trade, the date you got
filled is what you want here (if the order got filled). If the order never gets filled just
delete it from you journal.

– Security / FX pair: The particular security traded, this will either be a currency pair
or Gold / Silver for most of us. If you are unsure which currency pairs are best to trade,
check out this article: best Forex currency pairs to trade?

– Entry B / S: Here you enter whether you bought or sold and record the specific
level/price you entered at.
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– 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. If you have pre-determined that you will trail your stop, you can just type
something in this box describing your trail method, for example you might type; “trail
stop each time trade moves 1 times risk in my favor”.

– Possible $ Risk: How much money can you lose on the trade?

– Possible $ Reward: How much money are you aiming to make on the trade?

– Position size (lots): Your position size on the trade, or the number of micro / mini
/ standard lots being traded. 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.

– Pips +/-: How many pips you gained or lost on the trade.

– Total P/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.

– Exit date: Date the trade closed.

– Setup: What was the setup / why did you take the trade? Did you trade a valid price
action trading strategy?

Final thoughts
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Documenting your Forex trading results is a necessary component to becoming a
professional Forex trader. As your trading journal progresses over a series of trades, you
will start to see the significance of it more clearly. The power of risk reward and money
management will become glaringly evident to you as you look over your trading journal
after a few months go by. Having this tangible piece of evidence to explicitly show you
how discipline and patience pay off over time, is a critical element to attaining and
maintaining the proper Forex trading mindset. The reality of Forex trading is that at
some point on your journey of learning how to trade, you absolutely have to figure out a
way to become a disciplined and organized trader, otherwise you simply will not
become successful in the markets. Creating and meticulously maintaining a Forex
trading journal is the quickest and most effective way to develop into a disciplined and
profitable Forex trader.

You can download the Forex trading journal that I use – click here to download
the forex trading journal spreadsheet excel file (you will need ms office to open this
file).

About Nial Fuller

Nial Fuller is a Professional Trader & Author who is considered ‘The Authority’ on Price
Action Trading. He has a monthly readership of 250,000+ traders and has taught
20,000+ students since 2008. In 2016, Nial won the Million Dollar Trader
Competition. Checkout Nial's Professional Trading Course here.
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