This article looks at the reasons why you should have a forex live trading journal.
There are a lot of traders who do not understand the importance of having a forex live trading journal. There are a number of reasons why you need to have a trading journal. Knowing what these reasons are will help you understand the importance of the journal and what you are going to be using it for.
What is a Forex Live Trading Journal?
Before you can understand the reasons why you need to have a forex live trading journal you have to know what this is. The forex live trading journal is a written record of all the trading that you are doing. The journal will hold more information about the thought process that went into opening the trades then the reports you can get from your broker. The journal will also keep track of what signals you have been using and how effectively you are using your trading strategy.
Having an Historical Record
The first reason why you need to have a trading journal is to have an historical record of what you have been doing. When you have this record you will be able to review your trading and determine whether or not you are trading correctly. The historical record also helps you determine how you should be trading based on past performances.
Of course, to get the most out of the journal you will have to be detailed in the records. You also have to be honest about everything that you put into the journal. If you are not then you are not going to be using the forex live trading journal correctly.
Use as a Planning Tool
The trading journal is also a very helpful planning tool. When you have a record of what works you can plan to use the trading methods that are the best. You can also replicate your successful trades because you have a record of all aspects of the trade. No trades should ever be opened without a fair amount of planning.
The Verification of your Methods
As the trading journal is a historical record of all the trades you have done you can use it to review your trading. When you do this you can verify that the methods you are using are correct. There are a lot of traders who are able to determine good strategies from bad strategies when they look at the record in their trading journal. While both strategies may be making a profit on the market one might be better for your trading style.
Changing Bad Habits
Having a trading journal allows you to identify and change any bad trading habits that you may have. There are a lot of traders who have bad trading habits that they do not even realise they have. If you are one of these traders a review of your trading journal will be able to help you determine the bad habits that you have. Some of these bad habits do end in profit which is why many traders do not realise they have them.
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