Forex trading is a learning experience. How you trade tells a lot about your trading psychology. Do you trade emotionally, do you overtrade when you see a favorable offer, or do you strategize a lot before trading? But most importantly, how do you practice and monitor these things? That’s why it is essential to keep a psychological trade journal. This is your go-to weapon during critical trading situations because it will contain your behavioral tendencies. It makes you aware of the trading patterns that you shouldn’t follow.
Not knowing where you are going wrong is one thing. But that’s when your psychological trade journal will come handy. When you know your trading patterns, it helps you to stay away from the ones that can incur losses. So, here are a few tips to maximize your trading journal:
1) Balancing your positives and negatives
It is easy to write about your mistakes so that you don’t make them again. But you should also write about the positives. For example, if Strategy A and B failed, you can write them down in the journal. Additionally, you should also write about Strategy C and D that worked. Many Forex trading sites explain the different mistakes that traders usually commit. Forex Academy is one of the websites that not only point out the mistakes but also tells the different ways you can correct them.
So, your journal should have two parts. One with the negatives, containing the trading mistakes you should avoid, and second, the positives that talk about some of your successful trading strategies. This will help you to work on the negatives and turn them into positives in the future.
2) Always have a trading goal
Merely following your friends or fellow traders is now the way forward in Forex trading. You should always have a goal-oriented approach. For example, if you make a couple of mistakes on your first trading day, you should have a goal not to repeat them the next day or in the next week. Similarly, if you have a satisfactory ROI on your first trade, you should look to follow that strategy and earn more in your second attempt.
However, make sure that you judge the market conditions while trading. If you are successful the first day, it doesn’t necessarily mean the market will stay that way forever. So, keep an eye on the changing market conditions.
3) Always have an open mind
As already mentioned, there is so much to learn from Forex trading that even professionals would say that they don’t have full knowledge of the market. Keeping an open mind is the best way to maximize your trading journal. Learning should not be limited to correcting your mistakes. There are many new techniques you will come across as you start trading. Don’t shun off these strategies because you trade successfully without any help.
Forex trading can be tough at first, but if you have a journal, those tough days will become the pillars of your success soon.