Many traders know it’s a good idea to keep a trading log… but what exactly does a trader keep in his log?
While different people keep records of different details, here are 4 important points that you absolutely must include in your own log…
Detail #1: Entry/Exit setup (entry criteria)
The entry setup criteria is basically the market conditions which are required to trigger a buy or sell signal, according to your trading system (you DO have a trading system, right?)
This log serves as a reminder to yourself not to trade against the rules of your own system. Every time you’re tempted to enter into a trade that doesn’t follow your system rules, this step will hopefully remind you not to make that trade. Also, past entry setup logs help you to decide if a losing trade could have been avoided. If your log shows that you completely obeyed the rules of your system, then don’t beat yourself over a loss… you did the right thing.
Detail #2: Entry price & Lot Size
The lot size log serves to help you stick to your money management rules (you DO have a money management system, right?), and the entry/exit price helps you to calculate your pip gain or loss.
Detail #3: Time & Date
This log enables you to go back and analyze any specific trade you wish to examine. Without the time and date, you won’t know which portion of the trading charts you should be looking at.
Detail #4: Your Feelings
This is perhaps one of the most important logs to make. You’ll need to keep a record about how you feel about the trades that you took. Were you hesitant? Or were you confident? Keeping a record of your feelings helps you become aware of your psychological state when trading, and can be very helpful with identifying patterns in your trading behaviour.
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Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
