There are loads of ways a trader can manage his risk while trading in Forex. We have already introduced different technical and non-technical instruments like analysing the risk to reward ratio and setting the stop-loss and take profit that helps a trader limit their trading risks.
But there is one instrument that every professional trader keeps from his own eagerness, and that is a trading journal, or a logbook. A journal is typically kept to use as a log where traders write down all their trading activities. However, those of you are still thinking about the rational side of keeping a trading logbook, just follow along.
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Trading Journal
Keeping a journal is easy, but maintaining one well is not. When someone maintains it, it means, he basically writes every activity he undertakes, every decision he makes and the reasons behind making those decisions, taking those actions. Maintaining a logbook is also about checking it regularly and understanding the key reasons behind a win or defeat.
You may already wonder, why should you undergo such an arduous process just to maintain a logbook? In that case, let’s look into some of the common benefits of keeping a journal.
A logbook will help you
- Define the current condition of your life
- Keep progress of any goal and plan you have set
- Clarify all your strengths and weaknesses in your ability to handle stress and perform
- Provide an ideal system to self-teach and develop yourself
The last benefit is possibly the best one that you can receive by keeping a journal. It is clear that not every one of us is genius; rather, we all are extremely average. That’s why we all need to develop skills and learn from scratch.
In spite of that fact that modern technology has blessed us with internet and information sharing platforms, we still lack something. This something keeps us away from using essential tools, and a crucial asset to learn anything like the professionals in Hong Kong do. That something is testing the affordability.Learn more about the advanced trading environment from Saxo. Navigate to this website and develop your knowledge about this industry.
Most of us cannot afford a perfect mentor or premium course or instruments that help us commit fewer mistakes. That’s why there is no one or nothing that can guide us every step of the way, marking our mistakes, making us recognise the things we did right and the things that we did wrong, keeping us accountable for our actions.
A good mentor, regardless of their calibre, is extremely hard to get and almost irreplaceable.
A well-maintained trading logbook can be similar to having specialised mentor monitoring a trader through all his activities. It may hear or seem time-consuming and boring, keeping a logbook. However, a trader will be able to learn more from checking his past decisions and reviewing his own journey, than from attending a seminar or even reading a related book.
It will just keep being better and beneficial for a person who regularly maintains a journal. It will become an edge to him that eventually helps him stand apart from the mass traders and make a difference. Trading will never be more profitable if someone can introduce or make an edge for him.
Improving your trading skills
Over time, a review book will grow with its keeper, and if anyone keeps in-depth records on each and everything about their Forex endeavours, even the psychological issues and all the tiny system tweaks, it will teach them valuable lessons like:
- Avoidable news, financial or otherwise
- The proper risk volume one should take for a single trade
- The right time to start trading and stop following traditional rules
How disciplined a trader is with their journal will greatly influence their overall success. One should keep in mind (besides a logbook at his hand) that it’s all about one’s self and one’s life. So, there is no point in playing half of the game. Keep a journal and maintain it strictly.