Example of How to Write a Trade Journal - Writing Journal Examples
Trading journal will track all your trades in a trading journal. By following this simple, easy to follow trading journal writing tip, you 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 opening a trade transaction, write in a journal the reasons why you are 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 reasons why you're making this trade transaction.
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 because of anything other than a sound strategy. Do NOT 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 will never any lose money which you don't put in. A winning trading 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 BEFORE making the trade position.
Don't get trapped with a great entry strategy without having an exit strategy. Your strategy should have both great entry and exit strategies. One is useless without the other.
But you ask, Why bother? I know my forex trading exit strategy. Why do I ought to have it written down?
Well, the reason is this: human beings are at best 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 BEFORE exiting a trade transaction. If you're closing a position for any reason other than your original forex exit strategy, you must ask yourself why?
Your trading journal will save you more money than you can imagine. It will prevent you from making impulsive moves, which is usually why people lose money in forex.
Step three - Write down why you exited the trade position.
This should be the same reason that you wrote down in step 2. If it's not, it's upto you to analyze it. The most common reason why traders deviate from their trade strategy is lack of discipline. Your journal will be looking back at you with glaring evidence of precisely why you are not a winning trader.
Step 4 - How Do I Interpret the Forex results
You must learn from your own mistakes in fx. This is the best way for any trader to improve their profits. Everyone makes mistakes, but great traders are able to learn from them & not repeat.
And best way to learn from your mistakes is to document them in a trading journal. A few years down the road, you can still look back & realize that you are still making the same errors you were when you first began forex online.
This information 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'll 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 will see the type of trade setups which make you the most money, & a setup will emerge. Don't let this data on your trading journal go to waste.
You should do all effort to understand why those trades went well & try to replicate it as often as possible. Profitable traders know their strengths and weaknesses. They play on their strengths & try to cap their weakness.
Do not get lazy & forget to write down in your trading journal. Documenting your thought process is fastest and surest way to get better at Forex trading. Do this consistently, and you will learn more about your habits than you can imagine.
Your fx goal is to identify & break the bad habits as soon as possible. If you notice that you always hang on to a losing trades too long, you should do everything in your power so as to prevent this from happening again.
Summary
Your forex journal is gold. It contains a wealth of information which will play a vital role in your success as a fx trader.
We urge you to use it for atleast one month. If it has not helped improve your forex profits in 30 days, then feel free to stop.
But be sure to try it out before deciding not to. It might 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 intact confirmed by RSI, market has resumed down 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 middle 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 1 hour 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 down.
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 started to come down 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 moving upwards
Enter Long based on daily chart and all buy long signals have been met
Profit at Market close +45 pips
Why Transaction 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 was retracing but had already started 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 candle setup.
4H
Price has turned down after retracement, RSI at 38, stochastics leaving overbought heading down & MA Crossover system has given a short sell trading signal heading down.
GDP for Britain came out worse than 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 Transaction 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 transactions were profitable
Why transactions 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 trading 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 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 Transaction was opened
- Both MAs were heading downwards
- Relative Strength Index is below 50 Level, therefore the currency is bearish
- MACD is heading towards Bearish Territory
- 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 downward 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 downwards.
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 Trading Signal
Date: 12-13-2011
Why Transaction was Opened
- Both of the MAs were heading downwards
- Relative Strength Index indicator 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 system were followed before entering the short sell.
The long term price action direction of the EURUSD is downward as shown by downwards trend lines.
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 diagram the first transaction has taken profit the second one is still continuing.
EUR USD Closed by Take-Profit
3.
GBPUSD Short Sell - December-20-2011
Date - 20.12.2011
Position Opened - GBPUSD Short
Time frame - 4 hour chart
Why Transaction was opened
- Both MAs are heading down
- RSI is below the 50 center line mark
- MACD is heading down
- OBV has broken upwards trend & the market now is bearish.
A downward trend line can also be plotted on the price chart. This shows that rules of our system have been met and the market is bearish.
Take Profit Order - 300 pips
Stop Loss - 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 heading down
- Relative Strength Index indicator below 50 center line level
- MACD is moving down
- OBV has broken upward trend-line meaning the price will soon follow.
Since volumes always precedes price the price will break the upward trend line & start to move downwards. In addition the longer-term price direction is a downwards.
Closed
Closed by take profit order (300 pips)
Date: 01-02-2012
Why This position was profitable
The long-term trend is a downwards.
All the rules of the system were followed before opening the position.
GBPJPY short sell closed after take-profit.
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