Example of How to Write a Trade Journal - Writing Journal Examples
Trading journal will track all your trade positions in a journal. By following this simple, easy to adhere to trade journal writing tip, you as a forex trader can easily improve your forex results. Here is how you do it:
Step 1 - Write down WHY you're making a trade BEFORE executing a trade transaction on your forex journal.
Before and Prior to opening a trade transaction, write in a journal the explanations why you're making the trade. It doesn't have be long; it doesn't even have to be in compete sentences. Just write in the journal a few key grounds why you are making this trade position.
Be honest with this trading journal. If you are honest, it will prevent you from making the biggest mistakes in your forex trading. If you see that you're making the trade transaction because of anything other than a sound strategy. DON'T MAKE THE FOREX TRADE TRANSACTION!
If you make a losing trade, don't open another forex transaction immediately so as to make profits to neutralize the losses you have made, this is known as revenge fx trading, do not revenge against the market. Shut down the computer, walk away from your Desktop computer PC, & take a cold shower to cool down & chill. Remember that you'll never any lose money which you don't put in. A winning strategy is not only about how much you win, but how much you don't lose.
Step two - Write down how you will exit the trade transaction PRIOR TO AND BEFORE making the position.
Do not get trapped with a great entry strategy without having an exit strategy. Your trading strategy should have both great entry & exit strategies. One is useless and not useful without the other.
But you ask, Why bother? I know my fx trading exit strategy. Why do I ought to have it written down?
Well, the explanation is this: human beings are mostly irrational, impulsive, and emotional creatures. If you have your forex exit strategy written down, you have a point of reference when you exit a trade position. You'll refer to your trading journal PRIOR TO & BEFORE exiting and getting out of a trade transaction. If you are closing a position for any explanation other than your initial forex exit strategy, you as a trader must ask yourself why?
Your journal will save you more funds than you as a forex trader can imagine. It will stop you from making impulsive moves, which is usually and generally why people lose money in forex.
Step three - Write down why you exited the FX trade position.
This should be the same reason/explanation which you wrote down in step 2. If it is not, it's upto you to analyze and interpret it. The most regular explanation why traders stray from their trading strategy is lack of discipline. Your journal will be looking back at you with glaring evidence of precisely why you're not a winning trader.
Step 4 - How Can I Interpret the Forex results
You must learn from your own mistakes in fx. This is the best method for any trader to improve their profits. Everyone can make mistakes, but great traders are able to learn from these mistakes and not repeat.
And the best way to learn from your mistakes is to document them in a trading journal. A few years down the road, you as a forex trader can still look back and realize that you are still making the same errors and mistakes that you were when you first started forex online.
This info can't be found in any book or seminar. Your journal is personal and is uniquely you. Your personality will determine type of trader you will become, & will also determine type of mistakes you'll make.
Not only does your journal highlight your weaknesses, it'll reveal the transactions which are most profitable. After a little while you'll see the type of trade setups which make you the most money, & a setup will emerge. Do not let this data on your trading journal go to waste.
You should make and do all the effort to understand the reason why those trades went well & then try to replicate that as often as possible. The traders who are profitable know and are aware of their strengths and weaknesses. They capitalize on their strengths & try to minimize on their weaknesses.
As atrader don't get lazy & forget about your trading journal - keep writing down your trades in your trading journal especially while you are learning trading. Documenting your trading proces and your thought process is the fastest and most surest way to get better at Forex Trading. Do this consistently, and you will learn more about your habits than you as a trader can imagine.
Your fx goal is to identify and break bad habits soon as possible. If you notice that you as a trader always hang on to a losing trade transactions too long, you should do everything in your power so as to stop this from occurring and happening again.
Summary
Your forex journal is gold. It contains a wealth of info which will play a vital and crucial role in your success as a fx trader.
We urge that you use it for atleast 1 month. If it has not helped to improve your forex profits in 30 days, then feel free to stop.
But make sure to try it out before deciding not to. It may be just the tool needed to push your forex trading to the next level toward becoming a successful trader.
Writing a Journal Example Template - Writing a Journal Template Sample
The following is an example journal template that a trader can use to come up with their own journal template for writing their own:
Date - Friday 22 August
Page 1
EURUSD - Short Sell
Day
- Day Trade trend is short sell, RSI 33
- Volatility is high bollinger bands pointing down
- Price was retracing but downtrend is still in place confirmed by RSI, market has resumed downwards direction
4H
Price is moving down indicated by MA down crossovers, Relative Strength Index at 46 moving downwards, volatility is low.
1H
MA are moving down, Relative Strength Index at 34, volatility is medium & price is below the mid bollinger band.
Enter Short Sell based on trend for the daily chart which is short, RSI 33 and also all entry signals for H1 have been met.
Take Profit - at 100 pips between support1 & support2
Profit by Market Close: +33 pips
Why Trade Was Profitable
1H- MA for H1 heading down all day, MACD gave a sell trade signal after leaving over-bought, RSI less than 50 and the price action direction on H1 was down, volatility was medium & bollinger bands were pointing downward.
Day- The daily MA were crossing over to signal a long trend but was a non confirmation since the MACD showed short, RSI at 32, therefore this was just a retracement, the trade was opened when the price begun to come downward this was just a retracement.
4H- The retracement was already complete and the and the MA crossover system had already given a down crossover signal, Relative Strength Index was heading down and MACD also gave a short signal.
Page 2
USDCHF- Buy Long
Day
Trend is upwards based on RSI at 65 and MAs are flat, Bollingers are wide pointing up, volatility is high.
4H
Relative Strength Index at 50, stochastics leaving oversold, MA crossover has given an uptrend crossover signal.
1H
MA moving up, RSI at 64, stochastics heading upwards
Enter Long based on daily chart and all buy long signals have been met
Profit at Market close +45 pips
Why Trade Was Profitable
H1- Moving Average for 1 Hour headed up all day, MACD gave a buy signal after coming up from oversold, RSI was above 50 all day, volatility high and bollinger bands going upwards.
Day- the daily MACD was bullish, the RSI was at 68 moving upwards, market price was retracing but had already begun turning up, volatility was high with bollinger bands moving up.
4 Hour - Moving Average had an upward crossover signal, the Relative Strength Index was heading upwards, the MACD was above zero center line mark, volatility was low.
Page 3
GBPUSD- Short Sell
Day
Day Trading trend is short, RSI is at 23, the market has resumed downtrend after a retracement, big black Marubozu candlestick setup.
4H
Price has turned downwards after a retracement, RSI at 38, stochastics leaving overbought heading down & Moving Average Cross-over strategy has given a short sell signal heading down.
GDP for Britain came out worse than was expected, GBP Fundamentals and Technical Analysis = downtrend
Entry- Short based on Day and all sell trading signals rules on the 1H have been met
Profit at close +35 pips
Why Trade Was Profitable
1H- MA were heading down all day in a steep manner, the MACD had left overbought giving a sell trade signal all day, RSI stayed low at around 30, Fundamental technical indicators came out extremely bearish, volatility was high and bollinger bands were pointing down.
Day- The Daily MA were to crossover but because of the retracement, headed right down again with a large black candle(250 pips), MACD was bearish, RSI at 22heading down and bollinger bands pointing down, volatility was high.
4H- 4 hours chart the moving average had given a down cross-over signal, MACD was below the zero center line mark, Relative Strength Index was below 50.
Page 4
USDJPY- Buy Long
Day
The day trend is upwards, RSI at 52, stochastics heading upward and MA pointing sideways, the market has resumed upwards direction after retracement.
4H
MAs going upwards, stochastics leaving oversold region, RSI at 52
1H
MAs going up, RSI at 65, both stochastic heading upwards
Entry- Long based on Daily and all buy signals rules on the 1H have been met
Profit at close +64 pips
Why Trade Was Profitable
H1- MAs were heading up all day, MACD gave a buy signal, RSI was above 50 volatility was high & bollinger bands were pointing upwards.
Day Trade - MACD was in bullish territory above the zero center line, RSI was below 50 but pointing upwards, the MA were flat, bollinger bands were pointing upwards & volatility was low.
4H- on the 4 hour chart the moving averages had given a buy crossover signal, Relative Strength Index at 51 after crossing above the 50 center-line mark.
Profit at Market Close
EUR USD +33 Pips
USDCHF +45 Pips
GBPUSD +35 Pips
USD JPY +64 Pips
Total = 177 Pips
Why trade positions were profitable
Why trades were profitable is because multiple time frames analysis were used correctly and the direction of the price action was analyzed correctly by following the rules of my system as specified on the Forex plan.
Entry Rules in the 1 Hour time frame had matched before opening of these orders
Fundamental Technical Indicators were also used to predict some moves.
In Short - Today I stuck to all the trading rules of my system
..........................................................................................................
Record of Journal Entries Explained Using Examples with Images
1.
EURJPY Sell Position 13-December-2011
Position opened EURJPY Short Sell
Date - 12-13-2011
Time frame: 4 hr Chart
Why Trade Was Opened
- Both MAs were heading downwards
- Relative Strength Index is below 50 Level, therefore the currency is bearish
- MACD is heading towards Bearish Region
- OBV has broken the upwards trend line, thenceforth direction is downwards
The price is also touching the downwards trend-line thence this would be a good place to sell the currency.
Closed
Closed by Take-Profit 300 Pips
Date - 01-02-2012
Why this position was profitable
It was profitable because the risk reward ratio of this set-up was very high.
The trade went back to its downwards after touching the downwards trend line.
The OBV indicator is a leading indicator & when it broke its upward trend line it meant price was going to go downward.
After this leading signal all the signals turned to show a bearish momentum and a bearish market.
2.
EURUSD Short Sell - 13-December-2011
EURUSD Short Sell Trade Signal
Date: 12-13-2011
Why Trade was Opened
- Both of the MAs were heading downwards
- Relative Strength Index is below 50 centerline level
- MACD is heading downwards
- OBV indicator has broken its upwards trend line
Closed
Closed by Take Profit 300 pips
Date - 01-05-2012
Why the transaction was profitable
All the rules of our trade system were followed before entering the short sell position.
The long term price action direction of the EURUSD is downward as is displayed and illustrated by downward trendlines.
Technical Analysis in Forex Trading
There was a rally of the EURUSD which only went upto the previous resistance zone, a good place to sell again. From the above illustration the first trade has taken and booked profit the second position is still continuing.
EUR USD Closed by Take-Profit
3.
GBPUSD Short Sell - December-20-2011
Date - 20.12.2011
Position Opened - GBPUSD Short
Timeframe - H4 chart
Why Trade Was Opened
- Both Moving Averages are heading downward
- RSI is below 50 center-line mark
- MACD is heading down
- OBV has broken upwards trend and the market now is bearish.
A downward trend line can also be plotted on the price chart. This shows that rules of our trading strategy have been met and the market is bearish.
Take Profit Order - 300 pips
StopLoss - 100 pips
Take Profit Order Hit
Closed by tp order
Date: 29.12.2011
Why This Position was Profitable:
All rules for the trade system were met before opening the transaction.
GBP/USD after hitting takeprofit.
4.
GBP JPY Sell - December-22-2011
Date: 22-12-2012
Opened: GBP JPY Short Sell
Time Frame: 4 hr chart time frame
Why the transaction was opened
- Both moving averages MAs heading downward
- Relative Strength Index below 50 center-line level
- MACD is moving down
- OBV has broken upward trend-line meaning the price will follow soon.
Since volumes always precedes price the price will break the upwards trend line & start to move downwards. Additionally the longer-term price direction is a downward.
Closed
Closed by take profit order (300 pips)
Date: 01-02-2012
Why This position was profitable
The long-term trend is a downward.
All the trading rules of the system were followed before opening the position.
GBP/JPY short sell closed after take-profit.
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