Tag: Trading Journal

Categories
Beginners Forex Education Forex Basics

Five Important Stats to Log in Your Trading Journal

Whether you’re only considering trying out forex trading or you’re already a trader, there’s a good chance that you might have heard tips mentioning the importance of a trading journal. If you haven’t, you should know that these journals are essentially logs of all your trading activity. They are used to keep track of one’s […]

Whether you’re only considering trying out forex trading or you’re already a trader, there’s a good chance that you might have heard tips mentioning the importance of a trading journal. If you haven’t, you should know that these journals are essentially logs of all your trading activity. They are used to keep track of one’s […]

Whether you’re only considering trying out forex trading or you’re already a trader, there’s a good chance that you might have heard tips mentioning the importance of a trading journal. If you haven’t, you should know that these journals are essentially logs of all your trading activity. They are used to keep track of one’s performance over a certain period of time and can be used to evaluate your strategy, check out your profits and losses, look for any recurring issues, etc. However, what you keep track makes a huge difference in how effective your journal will be. If you’re not sure what stats to keep track of, take a look at our suggestions before for a quick guide. 

Win Percentage

Your win percentage is pretty straightforward, as it shows you if you’re winning more trades than you’re losing. Most of the time, a higher win percentage will mean more profits. However, this statistic might not be the best indicator of success if your losses are greater than your wins. For example, winning 1% on each winning trade but losing 2% on each losing trade would mean that you weren’t doing as well.   

Risk/Reward Ratio

Your risk/reward ratio revolves around the amount of money you’re willing to risk on each trade and how much you could profit. It’s important to figure out how much you want to risk on each trade so that you can ensure you could gain enough to make the trade worth it. 

Market Observation

In many cases, journal entries wind up more in the direction of one’s own self-analysis about the ways they were feeling or what they were thinking when entering or exiting the trade. It’s important to log this, but you’ll also want to include data about the market itself for the best results. 

Thoughts/Feelings

What were you thinking when you entered or exited each trade? Emotion is at the heart of trading psychology and it can really wreak havoc on your trades if you allow it to. This is why you should always log any feelings you might have that affected your trade. Did you pull out before hitting your stop loss because you were anxious? This would be an example of emotion you should log. 

Mistakes

You might want to beat yourself up over a silly mistake, but these things happen. It’s still important to log any losses that were caused by your own error, however, so that you will be able to see if it’s a big problem later on. One example of a common mistake many beginners make involves forgetting they’ve entered a trade. This might seem like a crazy mistake to make, but it is worth noting. You might just realize that avoidable mistakes are causing you to lose more money than you thought once you go back and check out those results.

A Few Quick Tips

  1. Always begin the journal entry before the trade and end it afterward.
  2. Write down everything in detail so that you won’t be missing any crucial information later.
  3. Remember to include market data and possibly screenshots, rather than only focusing on a self-analysis.
  4. Know that it’s important to log mistakes – if you forgot you entered a trade, be sure to write down what you were doing that caused you to forget.
  5. Don’t forget to log any emotions that might have affected your trading decisions.

 

Categories
Beginners Forex Education Forex Basics

The Importance of Keeping a Trading Journal

A trading journal is essentially a log of all of one’s trading activity, which is used by traders of all different skill levels to help improve their trading strategy. While beginners might benefit the most from journaling, we can always get better, therefore more advanced traders need to consider journaling as well. When you have […]

A trading journal is essentially a log of all of one’s trading activity, which is used by traders of all different skill levels to help improve their trading strategy. While beginners might benefit the most from journaling, we can always get better, therefore more advanced traders need to consider journaling as well. When you have […]

A trading journal is essentially a log of all of one’s trading activity, which is used by traders of all different skill levels to help improve their trading strategy. While beginners might benefit the most from journaling, we can always get better, therefore more advanced traders need to consider journaling as well. When you have all the data in front of you, it will be easier to note whether things are going right or wrong. 

First and foremost, you’ll need a good trading plan and system. Your trading journal comes in after you’ve accomplished some trading activity so that you can review and improve your trading plan. However, you need to track important information in your journal for it to work. If you don’t log some of the most important details about your trades, then you might miss crucial information when you go back to analyze that data. This is what most traders log in their journals:

  • Why did you decide to enter the market with a trade?
  • What time did you enter the trade?
  • What (precise) price was it when you entered the market? Enter this to the last exact pip. 
  • How long was the position open?
  • Why did you exit the trade?
  • How much did you win or lose?

Be honest when logging details about why you entered or exited a trade. If you got caught up talking, cooking, or doing something else and you simply forgot, write that down. If your emotions played a role in your decision, you’ll also want to note that. Were you feeling the excitement? Did anxiety cause you to close the trade before you initially intended to? Be sure to include information about the market that affected those decisions as well, rather than only focusing on your personal feelings. Otherwise, you might blame bad trades on yourself when it was really caused by the market’s behavior. Always be honest when logging information, even if it makes you look bad. Keep logging this information, even if you forget to use the journal sometimes. Don’t make the mistake of abandoning your journal once you improve in skill. 

Having a trading journal can be a key to success in the Forex market. If you log information in detail, the journal will become an excellent tool that can really help to hone your strategy over time. Remember to be honest with yourself and don’t forget to note the way that the market is behaving. Keep using your journal, even if you forget to log a trade or two because it will be helpful for long-term success. Your trading journal will prove to be one of the best, most customized tools in your trading arsenal.

Categories
Forex Course

42. How to stay away from the Forex Bucket Shops

Introduction

Introduction

Introduction

With a significant increase in the demand for retail traders to trade in the Forex market, tons of forex brokers have established their businesses to profit from their clients. This might seem like an advantage for traders as they have a variety of options to choose a broker. However, this is not the case.

In the world of forex brokers, there exist both genuine and fraudulent brokers. And these fraudulent brokers are referred to as bucket shops. These brokers have a frequent practice of misquoting and requoting and slippage, which favors only them.

Back in the day, as there was no internet, it was not possible for traders to know the actual price of the currency or security every moment. So, the clients used to place trades via phone. But, there were brokers who used to put the clients’ phone orders on slips and drop them into a bucket instead of officially executing them. Later, these orders were unofficially executed against the bucket shop operates, known as bucketeers.

These bucketeers usually did not disclose the real price of the currency, which was being traded in the market. They used to tell their clients that the price didn’t move in their favor, even if it actually did. But with the introduction of the internet and the improvement in the regulation of forex brokers, these scams have considerably reduced.

However, unfortunately, there still are these brokers out in the market. So, we’re here help to protect you from these scams. Things one must always keep a track of when trading with a broker are as follows:

✨ Constantly compare the price movement

Many traders trade based only on the prices mentioned by the brokers on their trading platform, which is quite dangerous. Currently, on the internet, there are many web portals that show the price feeds every tick. Hence, one must always keep track of the price feeds from several third-parties to confirm if the prices shown by the broker are real or not.

✨ Have a Trading Journal

Developing the habit of keeping a detailed journal of all the trades and transactions is extremely vital for a professional trader. Because if a trader feels that the broker has cheated them, they will need evidence to prove the genuineness in the filed case. And the simplest way to keep track of it is by taking a screenshot of every transaction they make. This can act as an excellent backup when they are cheated by a broker.

✨ Filing a legal action

Sometimes the disputes between the clients and brokers are not settled completely. So, this is when a trader must take legal action. If any conflict is unsettled, Forex traders can approach either the Commodity Futures Trading Commission (CFTC) or the National Futures Associations (NFA).

The CFTC has something called Reparation programs that provide an unbiased forum to handle and resolve customer’s complaints. You can click here to access the program.

Hence, by considering all these factors, one can stay away from being trapped by the fraudulent brokers in the industry.

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