Forex for a trader
Diary for good and bad trades in forex

Diary for good and bad trades in forexForex Social Trading: The Good and the Bad. Social trading is a relatively new concept in retail Forex trading and its popularity has grown substantially over the last few years. The concept that drives social trading—especially in Forex—is that the process offers an opportunity for Forex traders who trade online to retrieve information assembled from other retail traders and use their combined experience and knowledge to trade in their own accounts. Social trading works along the same lines as other popular social networks, such as Facebook and Twitter, where individuals communicate directly with others on an ongoing basis from wherever they are. And as with these other social networks, there are advantages and disadvantages to their use. Best social platforms. Forex Social Trading. Advantages of Forex Social Trading. The most obvious advantage of social trading is that it is easy . By monitoring and following other traders and basing their trades on the professional decisions of more seasoned traders, there is no need for individual Forex traders to do their own technical or fundamental analysis. It’s like having the answers to an exam before the teacher even gives out the test questions! With social trading, Forex traders have an immediate association with thousands of other traders in an environment where they can interact with each other, discuss viewpoints and then duplicate the trades that sound right for them. At the same time, both novice and experienced traders can learn how top performers come to the decisions they make and which strategies they use that work better than others in their efforts to make a profit while at the same time limiting the risks to their entire portfolio.

Another important benefit of social trading is that when trading as part of a group or community rather than as an individual, it is easier to avoid the personal biases that often result in losing positions. As part of the pack, trading becomes much easier to view changing activity in the market from a more unbiased perspective. For example, a trade that starts to show a loss can trigger emotional reactions in a trader which often lead to bad trading decisions later. When traders work together as a unit, it is easier to discuss and analyze market activity as it transpires and to make decisions that are more sensible. Finally, by opening up trading to the public, social trading acts to remove Forex trading from being an instrument that is normally restricted to top league brokers and multinational banks. And since all trades placed on a social trading platform are copied directly, no one can intervene in a trader’s trades so there should be more transparency. Disadvantages of Forex Social Trading. Social trading provides a free exchange of information to individual and small scale investors. And while this is certainly an advantage, it could prove to be a disadvantage. Since there are only a small number of traders who are consistently successful, by using social trading networks a trader can follow the wrong trader and end up with losses rather than the hoped-for profits. One of the major disadvantages of social Forex trading is that it remains relatively challenging for a trader to select the right social platform. There is no shortage of networking platforms and this makes it difficult for a trader to make a choice. And although social Forex trading is not a scam, there are some social trading scammers that don’t play by the rules and an unsuspecting trader can be easily swindled. Choosing the right trading platform is the key to social trading but it is tricky and traders are not always savvy enough to decipher the good from the bad. It isn’t only the devious broker or business that can use a good platform for scheming purposes.

Traders must also be careful of which traders they choose to follow as here too, there are untrustworthy individuals. Setting down a solid set of criteria developed prior to opening a trading account helps traders to select the best social traders from what can be hundreds on a leader board. There are various different social trading networks and they offer different features many of which are not fully understood by a newbie Forex trader. Some networks reward their traders not just for the profits they make, but also for their low risk management approach. This makes leading traders more risk conscious than those on other networks which reward traders for profits only and may attract more risk taking in the process. With this type of network, newbie traders are encouraged to start trading with additional risk which is not always a good beginning. In addition, traders just starting out in Forex trading may not understand the ramifications of the different social trading networks. For example, there are some social trading networks that limit the amount that a trader can allocate to 20-or 30% which is certainly beneficial as this forces the trader to spread his risk. On the other hand, a trader may be allowed to risk up to 100% on a single trade and can technically lose a full allocation in one trade. There are advantages and disadvantages to all investments and this holds true for social Forex trading as well.

The key to success in any endeavor is knowledge; the more a trader understands about how a financial instrument works, they less risk heshe will take and his chances for profit will increase substantially. Cina Coren is a former Wall Street broker and financial advisor. She holds a Master's degree in Communications and spent many years writing for international news outlets and journalistic publications. Today, Cina spends most of her time writing internet articles and blogs, and reading various newspapers to stay on top of the news. What Makes a Forex Trade Good or Bad? In one of my previous posts we’ve talked about the importance of reviewing your worst forex trades. But how can you distinguish between a good trade and a bad one? I felt the need to discuss this because there’s often a misconception that all winning trades are good and that all losing trades are bad. As you might have guessed, there’s more to it than just making profits. Whether or not the trade was profitable doesn’t determine if it was a good or bad forex trade. In fact, it’s possible to have good LOSING trades as well as bad WINNING trades. Still a bit confused? Here’s a good rule of thumb: A good trade is one that has been taken and managed in accordance to your trading rules. Let’s say that your system calls for a long position when the 100 and 200 SMAs cross over and stochastic hits oversold territory.

You see the market moving and feel eager to jump in, but you wait until your system’s signals line up before entering your trade. Finally, your system gives you the green light and you go long. The trade works for you for a while, but it eventually turns around and you end up getting stopped out. Don’t worry, my friend. You just had a good losing trade! It may not have earned you any profits (heck, it even cost you a few bucks), but you have something to be proud of because you showed discipline and stuck to your forex trading rules. Now, let’s assume your trading rules state that you can’t risk more that 5% on a single trade. But then you spot a sweet setup on USDJPY that you think is a high probability trade. You just can’t resist, so you end up taking the trade and putting 20% of your account on the line. When all is said and done, the trade turns out a winner and you find yourself sitting on a big wad of dough. There’s no need to celebrate, mate. You just had a bad winning trade. It may have led to huge profits, but you broke your forex rules in the process. You were lucky that the trade worked out in your favor, but keep in mind that in the world of forex, luck can dry out really quickly.

What should you do with good trades? If you exercised discipline and followed your trading rules, give yourself a pat on the back! Remember that, at the end of the day, traders strive to achieve consistency in executing solid trade processes and your decision to abide by your rules is certainly a step in the right direction. As I mentioned earlier, even if you weren’t able to rake in the profits with your trade, you can just chalk it up to experience and learn from what happened. Figure out what went wrong and decide if you need to make any adjustments next time. This learning experience can even help you improve your trading performance later on! What should you do with bad trades? If you broke one of your trade entry rules and your position is still open, get out while you still can. After all, you’re not supposed to be in that trade in the first place! For instance, if you broke your risk management rule which states that you should always trail your stop, you can still fix your trade by adding a trailing stop based on your rules. If, however, you’ve already closed a bad trade for whatever reason, don’t feel bad just yet. We’re humans and we make mistakes, unless of course you’re a robot like Robopip. Just remind yourself not to make the same bad trading decisions in the future. Make a note in your trading journal or write it down a hundred times if that’s what it takes to sear it into your memory.

The bottom line is that, as traders, we should focus on the process and not the profits. It’s often tempting to automatically consider winning trades as good ones and losing trades as bad ones, but that isn’t always the case. Don’t forget to look at the bigger picture and remind yourself that each trading decision you make should be on track to achieving consistency and becoming a better trader as a whole. Why Do Many Forex Traders Lose Money? Here is the Number 1 Mistake. by David Rodriguez , Quantitative Strategist. Big data analysis, algorithmic trading, and retail trader sentiment. Your Forecast Is Headed to Your Inbox. But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Your demo is preloaded with ?10,000 virtual funds , which you can use to trade over 10,000 live global markets. We'll email you login details shortly. You are subscribed to David Rodriguez.

You can manage you subscriptions by following the link in the footer of each email you will receive. An error occurred submitting your form. Please try again later. We look through 43 million real trades to measure trader performance Majority of trades are successful and yet traders are losing Here is what we believe to be the number one mistake FX traders make. W hy do major currency moves bring increased trader losses? To find out, the DailyFX research team has looked through over 40 million real trades placed via a major FX broker's trading platforms. In this article , we look at the biggest mistake that forex traders make, and a way to trade appropriately . Why Does the Average Forex Trader Lose Money? The average forex trader loses money, which is in itself a very discouraging fact. But why? Put simply, human psychology makes trading difficult. We looked at over 43 million real trades placed on a major FX broker's trading servers from Q2, 2014 – Q1, 2015 and came to some very interesting conclusions. The first is encouraging: traders make money most of the time as over 50% of trades are closed out at a gain. Percent of All Trades Closed Out at a Gain and Loss per Currency Pair. Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 312014 to 3312015. The above chart shows results of over 43 million trades conducted by these traders worldwide from Q2, 2014 through Q1, 2015 across the 15 most popular currency pairs.

The blue bar shows the percentage of trades that ended with a profit for the trader. Red shows the percentage of trades that ended in loss. For example, the Euro saw an impressive 61% of all trades closed out at a gain. And indeed every single one of these instruments saw the majority of traders turned a profit more than 50 percent of the time. If traders were right more than half of the time, why did most lose money? Average ProfitLoss per Winning and Losing Trades per Currency Pair. Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 312014 to 3312015. The above chart says it all. In blue, it shows the average number of pips traders earned on profitable trades. In red, it shows the average number of pips lost in losing trades. We can now clearly see why traders lose money despite being right more than half the time. They lose more money on their losing trades than they make on their winning trades .

Let’s use EURUSD as an example. We see that EURUSD trades were closed out at a profit 61% of the time, but the average losing trade was worth 83 pips while the average winner was only 48 pips. Traders were correct more than half the time, but they lost over 70% more on their losing trades as they won on winning trades. The track record for the volatile GBPUSD pair was even worse. Traders captured profits on 59% of all GBPUSD trades. Yet they overall lost money as they turned an average 43 pip profit on each winner and lost 83 pips on losing trades. What gives? Identifying that there is a problem is important in itself, but we’ll need to understand the reasons behind it in order to look for a solution. Cut Losses, Let Profits Run – Why is this So Difficult to Do? In our study we saw that traders were very good at identifying profitable trading opportunities--closing trades out at a profit over 50 percent of the time. They utlimately lost, however, as the average loss far outweighed the gain.

Open nearly any book on trading and the advice is the same: cut your losses early and let your profits run. When your trade goes against you, close it out . Take the small loss and then try again later, if appropriate. It is better to take a small loss early than a big loss later. If a trade is in your favor, let it run . It is often tempting to close out at a small gain in order to protect profits, but oftentimes we see that patience can result in greater gains. But if the solution is so simple, why is the issue so common? The simple answer: human nature. In fact this is not at all limited to trading. To further illustrate the point we draw on significant findings in psychology. A Simple Wager – Understanding Human Behavior Towards Winning and Losing. What if I offered you a simple wager on a coin flip? You have two choices. Choice A means you have a 50% chance of winning 1000 dollars and 50% chance of winning nothing. Choice B is a flat 450 point gain. Which would you choose?

50% chance to Win 1000. 50% chance to Win 0. Expect to win $500 over time. Over time it makes sense to take Choice A—the expected gain of $500 is greater than the fixed $450. Yet many studies have shown that most people will consistently choose Choice B. Let’s flip the wager and run it again. 50% chance to Lose 1000. 50% chance to Lose 0. Expect to lose $500 over time. In this case we can expect to lose less money via Choice B, but in fact studies have shown that the majority of people will pick choice A every single time. Here we see the issue. Most people avoid risk when it comes to taking profits but then actively seek it if it means avoiding a loss. Why? Losses Hurt Psychologically far more than Gains Give Pleasure – Prospect Theory. Nobel prize-winning clinical psychologist Daniel Kahneman based on his research on decision making.

His work wasn’t on trading per se but clear implications for trade management and is quite relevant to FX trading. His study on Prospect Theory attempted to model and predict choices people would make between scenarios involving known risks and rewards. The findings showed something remarkably simple yet profound: most people took more pain from losses than pleasure from gains . It feels “good enough” to make $450 versus $500 , but accepting a $500 loss hurts too much and many are willing to gamble that the trade turns around. This doesn’t make any sense from a trading perspective—50 0 dollars lost are equivalent to 50 0 dollars gained; one is not worth more than the other. Why should we then act so differently? Prospect Theory: Losses Typically Hurt Far More than Gains Give Pleasure. Taking a purely rational approach to markets means treating a 50 point gain as morally equivalent to a 50 point loss. Unfortunately our data on real trader behavior suggests that the majority can’t do this. We need to think more systematically to improve our chances at success. Avoid the Common Pitfall. Avoiding the loss-making problem described above is very simple in theory: gain more in each winning trade than you give back in each losing trade. But how might we do it concretely? When trading, always follow one simple rule: always seek a bigger reward than the loss you are risking.

This is a valuable piece of advice that can be found in almost every trading book. Typically, this is called a “ rewardrisk ratio ”. If you risk losing the same number of pips as you hope to gain, then your rewardrisk ratio is 1-to-1 (also written 1:1). If you target a profit of 80 pips with a risk of 40 pips, then you have a 2:1 rewardrisk ratio. If you follow this simple rule, you can be right on the direction of only half of your trades and still make money because you will earn more profits on your winning trades than losses on your losing trades. What ratio should you use? It depends on the type of trade you are making. We recommend to always use a minimum 1:1 ratio . That way, if you are right only half the time, you will at least break even. Certain strategies and trading techniques tend to produce high winning percentages as we saw with real trader data. If this is the case, it is possible to use a lower rewardrisk ratio—such as between 1:1 and 2:1. For lower probability trading, a higher rewardrisk ratio is recommended, such as 2:1, 3:1, or even 4:1. Remember, the higher the rewardrisk ratio you choose, the less often you need to correctly predict market direction in order to make money trading. We will discuss different trading techniques in further detail in subsequent installments of this series. Stick to Your Plan: Use Stops and Limits. Once you have a trading plan that uses a proper rewardrisk ratio, the next challenge is to stick to the plan. Remember, it is natural for humans to want to hold on to losses and take profits early, but it makes for bad trading. We must overcome this natural tendency and remove our emotions from trading. The best way to do this is to set up your trade with Stop-Loss and Limit orders from the beginning .

This will allow you to use the proper rewardrisk ratio (1:1 or higher) from the outset, and to stick to it. Once you set them, don’t touch them (One exception: you can move your stop in your favor to lock in profits as the market moves in your favor). Managing your risk in this way is a part of what many traders call “money management” . Many of the most successful forex traders are right about the market’s direction less than half the time. Since they practice good money management, they cut their losses quickly and let their profits run, so they are still profitable in their overall trading. Does Using 1:1 Reward to Risk Really Work? Our data certainly suggest it does. We use our data on our top 15 currency pairs to determine which trader accounts closed their Average Gain at least as large as their Average Loss—or a minimum Reward:Risk of 1:1. Were traders ultimately profitable if they stuck to this rule? Past performance is not indicative of future results, but the results certainly support it. Our data shows that 53 percent of all accounts which operated on at least a 1:1 Reward to Risk ratio turned a net-profit in our 12-month sample period. Those under 1:1? A mere 17 percent. T raders who adhered to this rule were 3 times more likely to turn a profit over the course of these 12 months—a substantial difference.

Data source: Derived from data from a major FX broker* across 15 most traded currency pairs from 312014 to 3312015. Game Plan: What Strategy Can I Use? Trade forex with stops and limits set to a riskreward ratio of 1:1 or higher. Whenever you place a trade, make sure that you use a stop-loss order. Always make sure that your profit target is at least as far away from your entry price as your stop-loss is. You can certainly set your price target higher, and probably should aim for at least 1:1 regardless of strategy, potentially 2:1 or more in certain circumstances. Then you can choose the market direction correctly only half the time and still make money in your account. The actual distance you place your stops and limits will depend on the conditions in the market at the time, such as volatility, currency pair, and where you see support and resistance. You can apply the same rewardrisk ratio to any trade. If you have a stop level 40 pips away from entry, you should have a profit target 40 pips or more away. If you have a stop level 500 pips away, your profit target should be at least 500 pips away. We will use this as a basis for further study on real trader behavior as we look to uncover the traits of successful traders. *Data is drawn from FXCM Inc. accounts excluding Eligible Contract Participants, Clearing Accounts, Hong Kong, and Japan subsidiaries from 312014 to 3312015.

View the next articles in the Traits of Successful Series: The Traits of Successful Traders. This article is a part of our Traits of Successful Traders series. Over the past several months, The DailyFX Research team has been closely studying the trading trends of traders via a major FX broker. We have gone through an enormous number of statistics and anonymized trading records in order to answer one question: “What separates successful traders from unsuccessful traders?”. We have been using this unique resource to distill some of the “best practices” that successful traders follow, such as the best time of day, appropriate use of leverage, the best currency pairs, and more. Stay tuned for the next article in the Traits of Successful Traders Series. Analysis prepared and written by David Rodriguez, Quantitative Strategist for DailyFX. com. Sign up to David’s e-mail distribution list to receive future e-mail updates on the Traits of Successful Traders series and other reports. Contact and follow David via Twitter: twitter. comDRodriguezFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. My 4 Secrets For Making The Perfect Trade Entry. As you probably already know, trade entries are very important in determining whether you succeed or fail as a trader. One good trade entry can make or break your month in the market. Yet, traders tend to take trade entries for granted by assuming they are the ‘easy part of trading’ and putting little thought into getting the best trade entries possible. A better trade entry can significantly improve the risk reward potential of a trade as well as get you a better stop loss placement which can decrease your chances of getting stopped out of a big move in the market. What are some things you can do to improve your trade entries? Today’s lesson will outline 4 tips for making better trade entries that can help you improve your trading results if you practice them consistently. Using limit orders to get better prices. A limit order is a pending order that you place above or below the current market price, depending on which direction you’re trading. If you’re trading long, you place a limit buy entry below the current market price, then, IF price rotates down into your limit buy order, you will get filled long. If you’re trading short, you place a limit sell entry above the current market price, then, IF price moves higher into your limit sell order. Limit orders give you the power to get into a trade at a price of your choosing. The only ‘catch’ is, you may not get filled at all on the trade, but if you do get filled you know you got a good entry price and a better stop loss placement than if you had just entered at market or on a stop entry.

One good example of using limit orders to get a better entry price is discussed in my article on ‘the trade entry trick ’ . The trade entry ‘trick’ is essentially entering a price action signal on an approximate 50% retrace, i. e. entering on a limit order as price retraces to the 50% level of a pin bar for example. This gets you a better entry because it significantly improves the risk reward profile of a trade by allowing you to place a tighter (smaller distance) stop loss, making it more likely that you’ll make 2R or more on a trade. The other big advantage to getting a better entry via a limit order 50% retrace (trade entry trick) is that it gives you more flexibility in your stop loss placement. You can either take the trade with a tighter stop loss as we discussed above, or you can use a normal distance stop loss (in the example of a pin bar, a normal stop loss distance would be the full length of the pin bar from high to low). As I discussed in my trade entry trick article linked to in the previous paragraph, using a normal stop loss distance with a limit entry order on a pin bar for example, allows you more ‘breathing room’ in the trade. Remember; limit orders allow you to ‘let the market come to you’ by only entering if the market retraces to a price of your choosing. You have to be prepared to miss the trade, but as we discussed above, the advantages of a better risk reward profile on the trade and increased flexibility in stop loss placement are nothing to sneeze at. Set up trades at the end of each day. Analyzing the markets and setting up trades at the New York close, is a very easy and effective way to improve you trade entries. Doing so, removes the noise and mental confusion that comes with trying to trade from intraday charts. Monitoring your trades just once or twice a day also helps you avoid the temptation of fiddling with your trades unnecessarily as well as the psychological ups and downs that come with day trading . The daily chart time frame carries more ‘weight’ (relevancy) than its lower time frame counter-parts. So, just the very act of focusing on daily charts is going to significantly improve your trade entries. Think of the daily chart as a sort of natural ‘filter’ for bad trade entries, since it filters out the noise and irrelevancy of the lower time frame price movement and as a result, the signals on the daily chart are more reliable.

Note: When I say “lower time frames”, I am mainly referring to those intra-day time frames under the 1 hour chart. Wait for confluence using the T. L.S principle. 90% of the trades I take use the ‘TLS’ model. T. LS. stands for Trend, Level, Signal, in other words; Find the TREND market bias, find the key LEVELS, and look for a trade SIGNAL , when you have all three of these or even two of these points in alignment, you have the ‘perfect storm’ in terms of a trading opportunity. Let’s look at some examples of trades that had T. L.S. confluence… The chart example below shows us a clear T. L.S scenario to enter the market from. Note the market bias TREND was clearly bullish, we had a clear key LEVEL through 1.6660 area and then a clear pin bar buy SIGNAL formed in alignment with the trend and the level. The chart example below shows another clear example of using T. L.S. confluence to enter the market. Again, we had an up TREND bullish market bias, a clear key LEVEL and then a clear pin bar buy SIGNAL formed in-line with the uptrend and the level. Thus, we had a highly-confluent price action entry signal. The last chart example we are looking at shows a clear example of using the T. L.S. principle in a down trending market. Note the clear down TREND that was in place prior to the formation of the signal, as well as the clear key LEVEL . Then once we got a clear pin bar sell SIGNAL at the intersection of the trend and the level, we had an obvious and high-probability trade entry on our hands…

Have a simple trading checklist and use it religiously. It’s not just about finding a trade and placing it, it’s about actually finding the right trades and then having confidence to pull the trigger. A simple checklist plan will assist you in filtering good signals from bad signals, and will also hold you accountable. A simple checklist might consist of several images drawings showing your ideal trade setup and chart conditions with some basic wording such as “Locate signal (insert signal type), find nearest key level, find trend, if chart conditions are confluent in alignment then consider trade. If correct money management parameters can be applied, i. e. if your risk reward makes sense on the trade, set up orders and place trade. It’s a personal and customizable plan designed for you and your personality. Of course, if you have not yet mastered a trading method, you will not be able to get good entries into the market. Thus, the first step is taking some time to get proper training on an effective trading strategy such as the price action trading strategies I teach in my course and members area. How to keep a Forex trading journal and make it your personal mentor. Updated: September 21, 2017. The Forex trading journal is the most underutilized, and the most neglected aspect in most traders’ arsenal. In this article I am going to reveal how to really make a Forex trading journal work for you, and show you ways to use your journal to improve your trading dramatically.

We’ve all heard it all before, and understand the importance of treating Forex as a business. It’s one of the first things you need to come to terms with when you transition from being a novice, to a professional trader. Running a business means keeping records. If you don’t keep records, it’s only a matter of time before you lose complete control of your business. The human brain is powerful, but it can’t keep track of every single variable. Try to take on too much, and your mental integrity breaks down. I’ve seen firsthand, what happens when business owners neglect their bookkeeping. The end result was they spent more time stressing trying to find important information. Forex trading is no different, if you’re not keeping a Forex trading journal you’re setting yourself up for failure. The problem with most Forex Trading Journals. You’ve probably come across Forex trading journal templates that have you mindlessly crunching numbers. Figures like your trade entry, stop, target price, the pair you trade, trade risk and trade return, etc. The boring stuff. You’ve got to ask the question, “What is this information really going to do for me?” Most of the information in common trade journals can be found in your trade history through your broker, with the exception of a few calculations that will probably just offend you or bring down your spirits.

Let’s face it, if you were doing well with your trading, you wouldn’t be reading this article. You’re here because you want a practical solution to correct your Forex trading mistakes. Okay granted, it’s good to know how well you’re doing overall. But, recording numbers alone is going to have a minimal impact on improving your future trading performance. For example, if your Forex trading journal is full of losing trades – those numbers won’t give you a solution. It’s going to make feel like the worst trader who ever lived, trust me I know, I’ve been there. This kind of number crunching is just not a practical, or a productive solution to most traders’ problems. You’re losing trades, so what do you do now? What’s going wrong? What can you do to fix the problem and move forward? These are the questions most Forex trading journals don’t answer. Those few traders who do actually keep a trading journal are under utilizing the full potential of keeping a Forex trading journal.

A journal should be used as a self-improvement tool. Even with the best technical trading system, the ‘holy grail’ if you will, you will not succeed if your head isn’t in the right place. Most traders fail because of psychological reasons. The Forex trading journal is the perfect tool for highlighting your own weaknesses, and building on top of them to solidify mental toughness. This is the way to break the chains holding you down and give you the power to move forward. “It’s not about the numbers, it’s about THE experiences” Sure, record the typical information about your trades like price levels etc.; but more importantly, also include your feelings, thoughts and emotions inside your Forex trading journal . Don’t just record how you feel when you place a trade. Have a space where you can record thoughts before, during and after the trade. Don’t be shy, everything must be recorded. You’re only hurting yourself by holding back information. Your Forex trading journal is private and the only person who needs to look at it is you. There is no reason to put it on public display – when people are looking over your shoulder in can give you performance anxiety.

The extra data in your Forex trading journal is critical for making the journal help you perform the way you need it to. You will be able see what emotions were present when you suffered losses, and even what emotions were presentabsent when you had winning trades. You’re keeping a Forex trading journal to reinforce good behavior. You need to highlight weaknesses so they can be avoided in the future. By including the psychological aspect of your trading in your journal, it’s easy to change your actions from destructive to constructive. A correctly utilized Forex trading journal will remove any feeling of being random, or the feeling of being “lost”. The Forex trading journal will help cement consistency in your trading – one crucial element to your trading success. As a Forex trader, you are the director of your own Forex trading business. You’re accountable for every decision you make. There is no one else to redirect the blame to, every decision falls back on you. Good or bad. You’re accountable for following a trading plan, using proper money management and keeping records.

If you neglect your responsibilities as a “business owner”, no one will be there to bail you out. Forex is a cut throat industry, you sink or swim. You need to do everything you can to ensure your head remains above water. Being fully accountable is going to actually make your life a lot easier in many ways. The trading industry is filled with losers, excuse makers, pretenders and people with unrealistic expectations of Forex trading. These guys don’t take accountability seriously and will blame the market, or their broker when something goes wrong. Your Forex trading journal is a superior way to reinforce accountability. If you step out of the confines of your trading plan, don’t use your better judgement, or just simply let emotions take over your actions. All of this needs to be recorded in your trading journal. No excuses!

I can’t stress this enough, no matter how embarrassed you may be about your mistakes. Don’t run away, face them head on! It’s essential to record everything, and have this data in your Forex trading journal for future reference. Recording negativity in your journal may seem counter constructive; but you can use this data , and turn it into a positive . It’s not about beating yourself up; it’s about self-improvement and moving forward. But you can’t do that unless you’re honest with yourself. Making sure that what didn’t kill you, Makes you stronger. We all know very well the emotional roller coaster of being a Forex trader. We can use our past mistakes as a means to become better traders – so that the loss “experience” was not a complete waste. In your Forex trading journal, you should be able to look through your losing trades; each position should have recorded your reasons for taking the trade, thought process, and actions throughout each position. Sure we know that Forex losing streaks are very normal. What you’re looking to identify are the common denominators that keep appearing on trades you’ve lost. If you go through your losing positions and keeping seeing “I moved my stop too early” comments, then you can safely conclude adjusting your stop loss is not doing you any favors, and only hurting your trading performance. Here is another one. You may see groups of losing streaks, and notice in your Forex trading journal recorded thoughts of desperation while you were trying to make up for previous losses. There wasn’t any good reason for taking each trade.

These positions were opened from a feeling of ‘urgency’ to recoup recent stop outs. What about winning trades? Go through your Forex trading journal and find consistencies with all the trades that worked out. Perhaps one recurring comment surfacing is “set and forget the trade”. You stuck to the plan left the market do what it had to do. Or maybe you recorded “as soon as I took the trade I closed my charting software down and only check the market once a day at the New York close”. Removing any temptation to intervene on my trade” Every trader is different and they are going to have unique challenges to face in their trading. By using the Forex trading journal in this way, you can quickly focus on the areas that need attention and really get to the ‘root of your problems’. Here is a list of things you should consider including in your Forex trading journal… Trade Date Instrument Signal taken Entrystopexit price Entry method Forecasted risk reward Actual Trade ROI $ Gained $ Lost Reasons for taking trade How you feel when you take the trade Did you stick to your trading plan What actions did you take while the trade was open and your reasons for it Did your actions effect the trade negatively or positively What emotions influenced your trade How do you think you could do better in the future. Before taking action, consult your Forex Trading journal.

Another powerful way to use your Forex trading journal is to review it before taking any action in the market. Prior to opening a trade, have a look through your journal and refresh yourself on what’s been working for you and what hasn’t. Remind yourself where your own thought process is working against you and avoid repeating past mistakes. For example, you may be thinking about entering a pin bar trade. The original plan was to go for the retracement entry. The market doesn’t look like it’s going to hit your retracement entry price and is moving without you. You’re thinking of jumping in anyway because you “don’t want to miss out”. After you look through your Forex trading journal, you can quickly reflect on the many times when you have entered trades impulsively in the past with an undesirable outcome; this should be a red flag to you. Alarm bells should ring inside your head when you have the urge to enter a Forex trade on the back of you chasing price around the chart again. If market breaks out and ends up turning into a breakout trap, your Forex trading journal would have saved you from entering a bad position. Don’t just consult the Forex trading journal when you’re opening a trade. Review it when you have those urges to intervene on an open position, like: moving your stop, closing the trade early, or maybe even removing your stop. Your previous experiences should be able to ‘advise’, or ‘mentor’ you to help you decide if it is a good idea or not. A Forex trading journal is there to profile your personality, your behavioral patterns and what works best for you and your trading account . It is a real wakeup call when you’re about to do something stupid. Forex trading journals are like having an experienced trader next to you, giving the best advice for each situation. A Forex trader’s best friend. The Forex trading journal is the ultimate ‘mentor’. A journal remains 100% logical at all times. They don’t get emotional and are not influenced by external factors.

When you start utilizing the full potential of a Forex trading journal, it becomes your best friend each time a trading decision needs to be made. The Forex trading journal keeps you accountable, forces you to learn from your mistakes and gives you crucial feedback that you need to develop your trading skills. By highlighting your accomplishments and red flagging your dangerous trading mistakes, there is no better way of self improvement to help you reach the ultimate level of confidence in front of the charts. ‘Plan your trade then trade your plan’ Remove the randomness and doubt, build a winning mindset and become the disciplined trader. At the start of each day, read through your Forex trading journal to prepare yourself mentally and emotionally before hitting the charts. You will have these thoughts fresh in your head the moment you look at the markets. It’s even a good idea to read back through this list each time you’re about to make a trading decision. Just keep reminding yourself of the dos and the don’ts. It’s quite easy to slip out of a disciplined mindset and start making mistakes again without even realizing it. Do everything you can to keep yourself disciplined. Hopefully after reading this article you view Forex trading journals not as that ‘boring spreadsheet of price data’, but a means of: identifying weaknesses, reinforcing strengths, and red flagging your dangerous trading mistakes, there is no better way. If you’re ready to move forward from here and embrace trading as your own business (which you are fully accountable for), and finally become a professional trader – you can check out our Forex War Room community membership. As a Forex trading community we all support each other, and keep one another on track with trading. Trading can be a lonely venture, it’s always good to have other like-minded traders to bounce ideas off and socialize with. I hope to see you on the other side. Until next time, all the best with your price action trading. Please share this article using the social buttons below.

Feeling Regret About Your Trades? Use it! Just like with almost everything in life, trading can cause regret. Whether it’s for a missed opportunity or for a wrong decision, those little red and green numbers have the ability to push us into some pretty extreme emotions. Regret can control our behavior because it happens right after we’ve had a bad trade. It freezes us before we open a new one because it says in a pretty clear way “you were wrong”. We usually, if not always, want to feel that we’re making the right decision before acting on it. We want it to be painless and risk free, no chance of failure. But trading doesn’t work that way. The challenge about regret is that it can happen in different circumstances. We can experience it both when we’re actually trading but also if we’re on the sidelines without any exposure. You can make a terrible decision and lose your whole deposit (or even more) and feel a whole mix of negative emotions, not only the one we’re talking about now. But you’re also prone to regret when you don’t take a position – now you’re missing out! You see the market moving exactly as you thought it would but you’re not making any profits. Here comes the good part – you can actually use regret to improve your trading. Observing yourself is an important part of being on the markets and you can do it in a consistent way with a trading diary. In it you can put down your thoughts and notes not only about trades but also about your reasoning for opening and closing them. Knowing what you did wrong, feeling bad about it, are the first steps to improvement. You can use regret to fuel yourself and get it right the next time.

It’s how you respond to losing trades and mistakes that creates the building blocks of a winning mentality and strategy. Instead of feeling sorry you can regroup and double down on analyzing your mistakes and reevaluate your decisions. And then you go again. When things don’t go exactly to plan it’s crucial to have the correct mindset to deal with the situation. Feeling sad for yourself, disappointed that you did something wrong doesn’t help you or your trading. Breaking down the trade’s components – timing, size, stop loss, take profit, reason for opening or closing it – is what needs to be done. It all comes down to action and risk. Being held back by something negative stops you from progressing and taking calculated risks is what it’s all about. In life and in trading. Diary for good and bad trades in forex. My friend Peter just blew his account. After spending $15,000 on Forex courses, $10,000 on coaching, and losing $5,000 to a scam broker (InvesttechFX) – he was ready to call it quits. After all of that, he decided to give it one last try. He bought an Expert Advisor (EA, also known as a trading robot). After 6 months, boom…

his trading account was gone – again . “I am just stupid! Bloody stupid.” he told me. However, Peter didn’t understand that it wasn’t his fault . He wasn’t “stupid”. He was being harsh on himself. It wasn’t his fault for believing marketers and people with their “track records”, MyFXBook results, and hundreds of testimonials. It is hard to resist. Upon closer inspection though, it was obvious to me that this would never have worked. Do you really think Warren Buffet relies on MyFXBook or a MetaTrader 4 account to make his buying decisions? Do you think that anybody in the City of London or Wall Street make trading decisions based on that?

I do have an unfair advantage though. I spent 23 years on Wall Street trading wealthy client accounts. The last 13 years have been spent trading for myself. During that time I have seen a number of miracles happen. One of my biggest wins early in my trading career was a trade in 1982. I started with a paltry $8,000 to my name and I used it to buy silver on the futures exchanges. As it turns out my analysis was spot on, and I ended up running my $8,000 account to a little over $280,000 in only 30 days. Since that time I have modified my trading strategy – slightly . After 120,000 trades, 1,200 trading accounts, and 8 Wall Street Firms – I am going to give you an exact guide to walking away with 4 additional winning trades per month and avoid losing your shirt – like Peter did (I’ll tell you what happened to him in a minute). Before you read this article you must agree to the following statements: There’s no magic pill. The markets are full of sharks and they will eat you alive. You need to stick to simple and sensible rules. The Forex systems and robots churned out by internet marketer’s are laughable. – especially if you think that’s how they make money on Wall Street. And trust me, they DO make tons of money.

Forget about making 20% per month. That’s how poor people think. I’ll let you know exactly how much you can actually make later in this article. Now, if you agree with all of those statements then I salute you. If you disagree with any of them, then close this page right now. Still here? Good… You are part of a small group of people who can separate reality from outright dreams and lies. And for that reason you will understand the words in this article better than anyone. I don’t have time for ‘internet traders’, the ‘Forex forums’, or any other breeding ground for newbies who pretend they really know how the markets work – and neither should you. This article is going to be simple. I am going to show you how to get 4 – yes, just 4 – additional winning trades every month. Don’t be fooled by the goofy EA developers and internet marketers out there. Having 4 profitable trades per month is more than enough to push you into the big boys club. You can make more, but my aim is to get you started with something consistent.

Once you’ve got that mastered you can increase your output. Why you won’t make a dime from the information contained in this article. Most people reading this won’t make a single dollar. Not because the content sucks – I believe it is some of the best trading tips in the world. It is because people are lazy and don’t implement what they learn. It is because people lose their shit and take too much risk. And it is because you might not be able to handle my style. My past results really are no indication of you making any money whatsoever. You might simply not have what it takes. However, there are a small percentage of people who do. And by following the rules you might be one of them. There are no guarantees. So read carefully and make sure you examine every word on this page as if your life depends on it. Because it might just change it forever – if you have what it takes. #1. The last opportunity for major profits in the Forex market. Have you ever been stopped out of the trade, just for it to change direction immediately? Do you ever feel like every decision you make is the wrong one? There is this big lie out there that hundreds of thousands of Forex traders believe.

And you may have believed this too at one point. “The Forex market is the most liquid market in the world and therefore it cannot be manipulated “. That is plain wrong. Governments have been cracking down on big banks because of their manipulation of a whole host of markets. Check out this article on the BBC: Have a look at this chart they supplied: Have you ever been knocked out of a trade that just seemed totally random? Well, chances are somebody rigged it. And chances are… you didn’t confirm your trade with a “2-pattern overlay”. More on that in a little bit. You and I are small fish who are competing with much MUCH bigger sharks. Sharks who know the waters better than you do. I used to swim with them. Merrill Lynch was only one of 8 companies I worked for on Wall Street. They did NOT take prisoners. There are entire teams who’s job it is to cheat the system.

And those are some of the brightest minds in the world from the best universities in the world. You have to accept that you cannot beat them. That’s why, what I’m about to reveal, is the very last opportunity to profit in the Forex markets. Forget scraping a few pips off the charts. Forget taking daily pivot trades, or “snipers”, or FAPTurbos, or whatever else these idiots are selling these days. You have to stick to simple daily trades that unfold over a period of days, weeks, and sometimes months. By riding the wave on a boat, you’ll be safe from the sharks on Wall Street. #2. How to dominate a currency with profitable trades. That’s a lie. You can never ‘dominate’ a market. That kind of thinking will get your account murdered.

However, you can put the odds severely in your favor by doing one thing. You can use a simple “2-pattern overlay” before entering a trade. I’ve been using this since the 80s and it still works better than anything. One million dollar client at EF Hutton & Co (another Wall Street company) dubbed me the “2-pattern wizard”. Every time I used it he knew he was about to make enough cash to buy another house. All you do is look for a minimum of two chart patterns to “confirm the trade”. Now, that doesn’t mean you confirm an entry. You simply confirm that you potentially want to take a trade. Here’s an example from one of my trades: I saw a triple “core support bounce”, and then a simple overhead resistance. (If you don’t know how to spot price patterns then don’t worry…

I’ll get to that). DON’T jump into the trade just yet – it isn’t that easy. You still have to know when to enter. I use a very specific ‘trigger’ that usually means the market is coiled like a spring, ready to burst in the right direction. Keep reading and you’ll learn all about it. #3. Use this simple trigger. Most newbies would simply jump into the trade because they saw a “double bottom” or some other pattern. You and I know better. You have to wait for the market to form a coil. There are several different types of market “coils”, however the one I’m about to reveal is the easiest to spot and tends to give me better results. It is called an “inside day bar”. So, looking at the daily chart I would wait for this bar to form. Here’s a real live example from a trade I took a while ago: Two inside day bars were the beginning of a nice coil. Here’s another example: #4. Have a tight stop loss and await the coming burst in movement. Remember that silver trade I told you about in the 1980s? It was my first big win. Even though I turned $8k into $280k the risk was minimal. I did that by scaling into a rocketing market.

Despite what people say… NEVER do that. Not until you understand the true risks involved. It can take a heavy psychological impact on you. I once saw a guy at Commodities Corp (now a division of Goldman Sachs) throw his computer across the room because he leveraged his position by scaling in too much. Theres no need to do it. Simply stick with what I am about to reveal and you could walk away with a handful of winning trades each month. Keep the initial stop loss tight, and then keep it loose… The initial stop loss is very tight. I anchor it close to the previous bar. If you’ve established the correct price action and trigger bar, you should see it shoot off in the right direction. Only 1 out of 2 trades tends to linger around. If they turn, then it means the trade is a dud and your stop loss will kick you out quickly.

However, when it goes… it goes. Here’s an example of a good trade I took. I made a fat 5.2% in about one week. This example shows how it immediately jumped in my favor. That means I spotted a good coil. By the way… those are actual trades. My trading platform marks them with those little circled arrows. Here’s another example: EURGBP immediately jumped after a trigger coil for a 2.5% gain in just one day. I don’t usually exit trades in the same day, however, 2.5% is a lot of money in my world. You don’t often see 2.5% days. If everyday was like that my account would grow by a billion every month. So when it happens… I take it. #5. Exiting the trade for a fat profit. This is how you get 4 additional winning trades.

If you get the coil right. Your trade should shoot out of the block like Usain Bolt. This allows you to have a tight stop loss. It puts you in a great position to make huge gains with a tiny risk. If your stop loss was far away from your initial entry then your risk would be greater and you’ll have to reduce your position size. Therefore, I would recommend a hard and fast 3:1 risk reward ratio. If your stop loss is 35 pips away, your profit target will be 105 pips (three times the stop loss). Now, admittedly I use a way more complicated process for my exits. I could write an entire book on it. However, when I looked back at my last 300 trades, I noticed that if I used THIS exit strategy I would still have made a great return. It is simple and it takes psychology out of the equation. I learned this while working at Bridgewater Associates (they manage about $170 billion) from a funny looking Irishman. Back in 20112012 I forgot this rule and I duly got slaughtered. There is a story inside of the book ‘Marketing Wizzards’. It talks about a great trader who locks himself in a room with no distractions.

No windows. No TV. No Computer. He has his assistant bring him his chart-book without the instruments named. So he doesn’t know if he’s trading pork bellies or gold. He doesn’t care. All he cares about is the price and the fact that he has no distractions. It means he ‘never loses’. My rule gives me the same sort of piece of mind. Before I let you in on it you must know what I mean by ‘never’ lose. When you lose a trade – you aren’t ‘losing’ . It is simply part of the process.

It is the equivalent of a business expense. You will always lose trades. However, when you lose your mind and you don’t follow your own rules. That’s when you truly lose. So here are the exact rules you need to follow to NEVER lose, always stick to your rules, and always win in the long run. Do not share your trading results. I did once. And only once. It was a huge mistake. All of the sudden I was answerable to thousands of people who happen to stumble across my profile. This doesn’t work when you are a trader.

I lost focus. I kept fussing about whether a trade was a winner or a loser. I didn’t focus on whether it followed the rules or not. As long as you follow the rules… you are winning. When you don’t follow the rules – you are losing (even when you make a profit). Systems and routines are the only thing that make you profitable in the long run. It is the only thing that’ll protect you against the sharks. So whatever you do – don’t share you trading results. Not even with your husband or wife. It’ll put external pressures on you. Don’t even mention a winning trade or a losing trade. Simply tell them you’re winning because you followed the rules. #7. How to make $1m from trading. Do you want to know the real secret? The one that most people ignore, because they don’t really take their trading seriously? Well, it is a system of recording and documenting your trades in detail.

I call it a trade journal. Super original right? Every single time I am about to take a trade, I stop. I take a snapshot of the chart, I write out my analysis (the reason WHY), and then I enter the order. 90% of my orders are pending orders, which means they only enter when the market reaches a specific price. This is an example of three pages inside of my journal. By doing this with your trading you’ll be able to get a lot more focussed. When you look at the markets you will feel excited. You will get a rush of adrenaline.

Stop. Take a deep breath and start recording the trade before it happens. It gives you the breathing room you need to make rational decisions. It helps you to be a winner every time by following the rules. Seriously. Get my journal. It’ll show you how you should structure yours for maximum results. You’ll also get a better feel for the way I trade. #8. Past trading results on MyFXBook will drain your trading account. This is the biggest difference between the Wall Street traders and normal folk. On Wall Street – we know that past results don’t mean anything.

They really are no indication of future performance. Even if the results are third party verified. Think about it. How many times have you bought a system or a program based on their past results? And… how many times has it worked out? Now you have two choices. I should congratulate you. You’ve read the entire article. However, this is just the start. You now face two choices. Choice #1. Forget what I told you and keep doing what everybody else is doing. It is easier to follow the herd after all. Some of the things I talked about aren’t easy. Some of them are plain boring. Yet this is what it takes. And I think you know that, which is why you’ll probably go for… Choice #2. This is the choice smart Forex traders go for. You grit your teeth and follow the rules. So that you can finally break away from the ‘internet herd’ and actually start taking pride in being a trader. Don’t fall into the same trap as Peter.

Be the person that “actually makes money”. How nice would that feel for a change? I’ll help you out by giving you my 21 Power Strategies without asking you for a dime. Just let me know which email address I should send it.


  • Diary for good and bad trades in forex