Cryptocurrency, Forex

If you only knew that by writing down a few numbers you could easily become a Star Trader…

Source: http://forexlife.me/if-you-only-knew-that-by-writing-down-a-few-numbers-you-could-easily-become-a-star-trader/

If you only knew that by writing down a few numbers you could easily become a Star Trader…

You can become a star trader

Trading can be a daunting activity. Your emotions are on the edge, your money is in the line and your beliefs about the market are your best weapon to try to take a bite of whatever instrument you are trading and succeed in this ultra-competitive business.

Anyone could just enter a trade and be successful once or even a few times. But to keep being successful for the long run you’ll need consistency and the only way to achieve this consistency is to understand and analyze what you are doing and why you are doing it.

I don’t mean that you must have a strategy, which you should have. I also don’t mean that you must have your emotions in check, or trade with a stop loss, limit your position sizing or any of all this things that you should also have and be aware of their importance.

One of the key components of your trading success and your trading business as a whole, is to keep a Trading Journal

I know it can be cumbersome and boring, specially if you scalp or make many trades a week or a day. Because every time you trade you will have to remember to enter all this little data in a chart, I know it is not the funniest thing to do. But if you plan to make your trading into a serious business and eventually make some money or even a living out of it:

You MUST start keeping a Trading Journal.

This journal will prove amazingly useful after a few weeks and, even better, after a few months. You will have invaluable data on why and how your performance went, you will have a snapshot of your victories and defeats that will help you enormously understanding how your system performs on the long run. So, for example, if after six months of trading a specific system you find out that you had six loses in a row and then your system kept on performing with normality, you will know what to expect and the next time you have a few losing trades in a row you will not get discouraged, angry or emotional about it, and start to see it as “normal”, since this behavior will be within the parameters of your trading system. This will help you also to define your position sizing and find the overall expectancy of your system.

Other advantage of your Trading Journal is that from the moment you start taking note of every trade, you will stop entering impulsive trades (or at least you will do less of them), since everything will be on record, which will make you think twice about entering or not entering a trade. You must remember that good trading is about good habits, and your Trading Journal will be your self-control on the way you are handling those good habits.

You don’t need to make it any complicated and a few parameters would be enough to retrieve all this vital data to understand and improve your trading habits. I will provide a Trading Journal Sample where you can download a spreadsheet with parameters that works for me, although you can ad as many as you want if you need more info, just don’t make them overly complicated and remember that you will need to keep this spreadsheet by your side and enter the info EVERY time you trade. After a few weeks of doing it, it will become second nature and you will not even think about it anymore.

Trade, demo please, for a few months with the journal and use ONE or maximum TWO systems that you backtested and feel they could work for you and let me know how you did with the journal. I am sure you’ll have tremendous insight on your personality as a trader, and how to make the system work for you.

 

 

 

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