Successful traders will agree that keeping an online currency trading journal is one of the crucial factors in achieving online currency trading success. Not only does a good trading journal contain the trade plan or profit and loss components, it should be complete with risk management plans and psychological details.
Online Currency Trading Journal Components
The first part is all about analysis. Some traders rely on technical analysis while others prefer fundamental analysis. A good number also make use of both, along with sentiment analysis.
This part should contain your bias for the currencies and why, as well as the reasons for your entry and exit points. It should have a clear explanation as to why you predict the pair will behave a certain way.
The second part is all about risk management. After listing the reasons why you think a pair is bullish or bearish, you should then come up with a contingency plan in case your online currency trading idea is wrong.
This part should contain details on how much you are risking per trade and at what point will your analysis be proven wrong. Your exit plan should be made clear here.
The third part is all about the time frame. How long do you plan to hold on to your trade? This can depend on the type of online currency trading style you have.
If you’re a day trader, you should specify until what trading session you plan to keep your trade open or if you will have any reason to close early.
If you’re a swing trader, you can determine how many days or weeks you plan to keep your trade open or if there are any market changes that could lead you to exit before that time frame.
The last part is all about online currency trading psychology. This doesn’t necessarily have to be included on the moment you come up with a trade idea but it can be in the form of updates along the way.
You can mention how confident you are in your trade position or if you are feeling uncertain. You can also list emotions such as regret or anger if you didn’t play the trade so well.
This can help you manage your emotions along the way.