In previous blogs I have written about the need to record your trades and also listed the best journal options out there. However, if you are a new trader you might be struggling with the most efficient way to record that will help you analyze your trades.
When it comes to conducting Forex analysis or improving upon it, half the battle is knowing where to look. Once you figure out which metrics are the most important, you can focus your time and effort on them. To help you with your analysis, I am chalking out the most important metrics for your journal entries.
Let’s get right to it.
Important Metrics for Your Trade Journal
- Duration or Holding Time
Record how long you held a position for. There are different styles of trading. Some traders identify themselves as exclusively being scalpers and then there are those who categorically go for long term trades. But not everyone is like that. If your holding time for different trades tends to vary then that is a good metric to note down.
Do this for both winning and losing trades so you can identify a pattern if there is one and spot the holding time or range that you perform better with.
Even though Forex is a 24 hour market, there are different sessions around the world. Each session contributes different amounts of trading volume.
Recording the session you traded in along with the results of the trade will show you what time is best for you. For example if you are a scalper, you want to trade during a volatile session. The London session is usually good and when the New York and London session overlap is also a good time to trade for scalpers. So record which time is best for you.
- Position Size
You can trade different lot sizes in Forex. Depending on the size of your account and the level of leverage you are using, you will decide your position size. Figuring out a position size that can give you your target profit without risking too much of your account is very important.
Record the position size of all your trades along with the leverage ratio to see what works best for you.
- Market Conditions
By market conditions I mean what you can see on the charts. Was the market indicating a reversal? Did you accept that reversal or did you go against it? Were there established support and resistance levels and a clear range? Were you working with the market or against it? Record all this so you can compare different trades and their outcomes.
If you are subscribed to Forex signals and follow them, you need to see whether or not they worked and how useful they are. Record the signals that were sent (if you received any that led you to trade) and see the results of the trade. It will help you to quantify their efficiency and usefulness to you.
I hope this will help you make informed decisions with your trades and be more analytical.