Forex Traders: For The Record

Forex Traders: For The Record

by Harold Hsu

Forex traders live from moment to moment. With today's advanced technology that gives us tick-by-tick live price feeds, we are constantly looking at the trading charts at all times of the day... and we start to become obsessed with every single price fluctuation.

In this climate of rapidly changing market prices, it's not easy to trade while keeping ourselves focused on the big picture. Unfortunately, focusing on the big picture is essential for sustained profitability as a trader.

And that's why it's important to keep some sort of record of all our trades. Some people call it a trading diary, but I personally prefer to call it a trade log. Call it whatever you wish... the idea is to take down your reasons for entering (and exiting) your trades, and to also note down your feelings during those trades.

Now, this idea may turn you off because of its sentimental connotations, but believe me, there's really nothing sentimental about a trade log at all. In fact, the opposite is preferred! You'll need to objectively list down the reasons for your trading actions, so that you can later analyze your trading decisions: "Did I do the right thing?", or "Why did I enter into this trade in the first place?"

These are often the questions we ask ourselves after a trade goes bad. Sometimes it's our fault because we ignored the rules of our trading system, and sometimes it's not our fault at all. The point is to understand whether your losing trades could have been avoided at all.

It's hard to admit it when we make a mistake, and it's the job of a trade log to inform you whether the loss could have been avoided.