By Your Trading Mentor
NO ONE’S CALLING THOMAS EDISON A FAILURE RIGHT?
Have you ever heard the saying that there are no mistakes, just data collection. I think Thomas Edison famously made 1,000 failed attempts to create a light bulb and declared he didn’t fail he just learned a load of ways not to do it in the process. I’m fairly certain the majority of us only remember him for his great success. Yet for some reason when it comes to forex trading, everyone seems to expect that they are to become an expert profitable trader straight away in their first year. You will make a lot of mistakes when you first start trading forex because it’s just part of the course of learning something which is new. Have you ever started any new job at all and made no mistakes??
But obviously you do want to make as few mistakes as possible and the ones you do make you want to keep them as small as possible, as your hard earned money is on the line here.
So here is how you can turn any losing trade in forex into a win:
Ask yourself two questions
What did I do wrong?
What can I do different next time?
And then, once you have established the answers to these questions you suddenly have a lesson which you would likely have paid a trading mentor for. So just think of the loss you made on the trade as an investment in the lesson and make sure you don’t make the same mistake again!!
I always say that the trade is not over when the trade is closed, the trade is over when you have finished reviewing the trade.
On this topic, one of the best and quickest ways to improve your forex trading, is undoubtably to keep a forex trading journal. The same principle applies as you are keeping a note of the trades you placed and keeping note of what went wrong so you can avoid doing this next time. BUT also, I think it’s really important to look at what you are doing right as well. Because not only can you learn what not to do next time from your loses, but you can also learn what you want to do MORE of from your wins.
There are a few columns I like to have in my trading journal such as time opened, time closed, opening notes, closing notes, as well as the obvious things like which strategy you followed, which forex pair you traded and in which direction. The reason I like to pay close attention to when the trade was opened and closed is because this can help give you clues as to whether you are making more money at certain times of day or in certain trading sessions. You can also add categories such as what time frame you were trading on or if you let the stop loss hit or the take profit, or if you actually closed your trade manually.
While none of this information is particularly exciting for each isolated trade, once you’ve placed about 50 or even 100 trades, you will start to see patterns and clues creeping in making suggestions as to what you should be doing more (or less) of. Having a trading journal is like having your very own trading mentor!
I created my trading journal on Google Sheets, and it’s got some cool features such as the pips lost or gained column which is formatted to turn green for a win and red for a loss and all my wins and losses get added up on the bottom line which again automatically turns red for a loss or green for a win. I also use a lot of drop down menus to make it really easy to fill out. The more tedious something is, the less likely I am to actually do it, so these help keep the process quick and easy.
If you’d to watch a video tutorial on how I created my trading journal on Google Sheets then you can click this link and watch a YouTube video which I recently made
Love from your Trading Mentor x