Whether you are a day trader or scalper or a swing trader, you will always feel the need to keep a record of all your trading activities. Therefore you will need a trading journal to assist you in doing so. A forex trading journal is an important tool that helps traders keep a proper record of all their trading activities. It also helps traders to determine their performance over time. This work will therefore help learn extensively the meaning of a forex trading journal and the reasons why you need to have one today.
Meaning of Forex trading journal
A forex trading journal is a comprehensive log of all the trader’s trading activities. This helps him to identify his strengths and weaknesses. They point out to him the important areas of improvement and the underlying errors in his trading strategy. The forex trading journal provides a written record of all the positions opened and closed in the market together with the profit or loss made from each trade. This makes it possible for the trader to look back and evaluate his success and failures from a strategic standpoint. It can also be used by the trader to monitor his progress and keep him on track with his goals.
A forex trading journal is an essential tool for every forex trader today as they help in tracking his trading performance. The journal often includes such information as: entry and exit points, trades taken, profits and losses, and other notes regarding the trade that may be beneficial in understanding the overall trade.
Nine important reasons why you need to have a forex trading journal today
- Helps the trader to improve more on his profitable strategies: A forex trading journal often displays all the strategies used in the past. This will help the trader to sieve out the most successful strategies to abide by them and avoid the unsuccessful ones.
- Monitoring one’s trades: An important way traders use to ensure that the broker does not manipulate the market, especially while trading with the recommended Forex Brokers for Beginners is to keep a trading journal. This journal helps the trader to compare his entry and exit points and ensure that the returns are befitting.
- Emotional Control: Having a trading journal can be a great way for traders to control their emotions and try to stay disciplined while trading. Thus, each time the trader views his performance, he can always see his aggressive positions taken and how they impacted him in the past. This will help him to avoid such mistakes in the future.
- Understanding the market structure: A forex trading journal often serves as an important tool for developing a proper understanding of the market structure; as it keeps records of the previous price movements which could be very useful in determining future price movement.
- Useful in building experience: The forex trading journal records all the trader’s trading experience and reminds him of those experiences to apply them while trading.
- Accountability tool: A forex trading journal helps traders to keep a proper account of all their trading activities.
- Useful in calculating the amount to be paid as tax: Keeping a forex trading journal makes it easy for traders to calculate their capital gains over time which is very useful in determining the taxable income.
- Planning: The forex trading journal is very useful to the trader in planning what pairs to trade often and those to cease trading. This is made clear by accessing his past performances on those pairs.
- Experts Advisor: A forex trading journal is an important tool consulted while building a robot as it helps the trader to choose the most profitable strategy with which to configure the robot.