The observations novice forex traders should record for each and every trade

Aug 6 • Forex Trading Articles, Market Commentaries • 231 Views • Comments Off on The observations novice forex traders should record for each and every trade

Ensure that you document the precise entry point for every trade you take. Record how close to the quote your trades are filled, whether or not you experience any slippage and how consistent the spreads are during various times of the session, or during times when high impact calendar data is published and when outlier political events break. 

Perhaps take a snapshot of your chart and record the image both at entry and at exit. Not only will this enable you to establish how close your fills were to the quotes you saw on your platform, you can also easily record how close your exits are to the quotes. If you’re trading using an indicator based trading system you can also record how precise you were in relation to the signal you rely on. Did you stick to your plan, or did you enter and exit too early?

It’s worth noting what emotions you experience on entry and what expectations you have for the trade, assuming you’re not applying a take profit limit order to each and every trade. It’s also worth noting the position size you’ve used and why. Did you also stay within the risk tolerance and money-management discipline you’d outlined in your trading-plan?

Record your initial stop loss decision, this can prove to be extremely useful if your trade goes bad, or if your stops are hit too early consistently. In doing so you’ll develop a plan as to where you should place your stops. For example, you may decide to place your stop at the session low if you take a long trade and vice-versa if you trade short.

Make a note how often your take profit limit orders prove to be effective. You may reach a conclusion that you’re leaving too much profit on the table, therefore, you might consider widening your profit range. 

It’s worth asking yourself several other questions, for example, did you commit any errors of execution, what could you have done to minimise the size of the losing trades and what could you have done differently in order to maximise the profit potential of the winning trades?

Record what regrets you have over a period of trades. Do the regrets involve emotional issues related to lack of control or your psyche, or do the regrets involve corrupting your trading-plan?

Has your belief in your method and trading-system remained steadfast during the trades you’ve taken during a session, or on a specific trading day? You must note how much faith you have in yourself to follow your trading plan. Ask yourself have any doubts appeared. For example, do you still have faith in your trading strategy to develop profits over the medium to long term? Notice if you’re satisfied with your choice of trading style; if you’ve settled on trading as a swing-trader or day-trader, ask yourself if you’re still comfortable with your decision.

How stressed are you? Make a mental note of what  (if any) anxiety and stress you might have experienced during your trade, if you followed your plan did you experience stress? If you did then perhaps there are elements contained in your trading-plan that require addressing.

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