When starting to calling Forex , there are two main steps to follow before expecting to start making money intelligently (ie relying on logic and analysis).
The first step is to Aristotelian the basics of technical synopsis and acquire the necessary financial knowledge to be in a position to assess the impact regarding the news and statistics. Once well informed, the trader can start practicing, but the initial purpose should be to learn and not to suddenly become a millionaire.
Beginner’s should have in mind to gain first the necessary experience, first with a demo account (for a limited time demo accounts are not always the best way to train , as we undergo already explained) and then practicing over real trading cautiously, with very slender positions.
To gain experience more quickly when starting the actual trading, there is a great tool: The trading journal.
What is a trading journal?
In short, it means to list all your positions in the forex market and their criteria. Consequently you can analyze your trading to establish what works for you and what does not work, therefore draw conclusions and improve.
The trading journal can swipe many forms, such as:
* A simple notebook meets style
* An excel spreadsheet
* A semantic document, etc.
What should you put in your trading journal?
The more detailed the journal is, the better. For completeness, we container add:
– Date and continuum of entry into position
– Currencies concerned
– Size of the position
– Direction of trade (buy/sell)
– Stop limit
– Unit-time graph used
– Reasons for position
– Date and time position output
– Reason-position output (stop? Limit? Cue contrary? Fear error?)
– Review of the operation
– Free Comments noted that will help you improve
You might also include a screenshot of a graphical representation of your entry and exit positions.
After filling your trading journal, you can begin to analyze it.
The easiest journey is to sort your trading journal is by losing and winning trades.
The next step is to serendipity unrefinement foundation intervening the winning trades and losing trades and find “winners patterns” and “losing patterns”
* Mayhap some type of signal that helped you succeed?
* Maybe for X either Y reasons you always lose money on some particular currency pair?
* When trading in the evening you may be doing distal better than trading in the morning perhaps?
* Your stops are often affected, perhaps they are too tight?
* You rarely conformed to your stop and your limits?
* The trades on the 5M charts unless you succeed on the H1?
* Etc., etc., etc. …!
Then the next step is simply to implement the conclusions of these observations: Emphasize on what helps you succeed and discontinuance what is the lawsuit regarding your losing trades. It’s as simple as that.
With this method, you prefer not simply lose your money but instead you will learn from your mistakes. It is said that the losses are useful because they fashion the experience, only if we do not analyze the losses and draw the earmark logical conclusions, then we have just wasted our temporal and hard cash for nothing. We strongly recommend that you use a trading journal in your forex trading, especially if you feel that you’re still in the “acquisition experience trader” phase.