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MasterForex Broker - Trading Journal Article

Discussion in 'Company Articles' started by MasterForex Broker, Jun 12, 2012.

  1. MasterForex Broker

    MasterForex Broker MasterForex.org Representative

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    Discipline for trader is one of the basiс things. One of the methods to maintain the discipline – is to keep a trading journal. The aim of trading journal is minimize the losses.

    Tasks which are solved with trading journal:

    - self-improvement

    - analysis of your own transactions

    - the formation of a plan of action in any given situation

    As a rule, trading journal has:

    - justification of each transaction

    - justification of choice of levels of input / output

    - description of the action in certain circumstances


    Katy Lin, trader of JP Morgan bank, then Chase&Co, offers to divide the journal for 3 parts:
    Test questions about currencies
    Expected deals
    Opened or completed deals

    Test questions about currencies

    Currency pair EURUSD GBPUSD USDCHF USDJPY

    Current price
    Day maximum
    Day minimum
    10 days maximum
    10 days minimum

    Trend ADX (14) > 25
    the intersection of Bollinger
    the intersection of 50-days
    the intersection of 100-days
    the intersection of 200-days
    Other trend indicators

    Diapasons ADX (14) < 25
    RSI (14) higher
    RSI (14) lower
    Stochastic > 70
    Stochastic < 30
    Other oscillators


    The first part of the table provides an understanding of where the price is in the frames of previous movement: closer to maximum or minimum or in the middle. The next part of the table provides an understanding of trend’s character.

    ADX – is an index of middle direction of movement, one of the most popular determine trend strength indicator. The value higher than 25 means that trend is strong, the value lower than 25 means that the trend is weak.

    This part of the table has the examples of trend indicators. During the development of strong trends in price often touches or crosses the upper or lower Bollinger band. Then more long termed Moving Averages go, crosses of these averages in the direction of trend can be used as confirmations. Then indicators more convenient to you can go. If there are more than 2-3 marks in this part of the table, it’s better to look for an opportunity of buying in an uptrend or selling on the correction in a downtrend, don’t sell at the top and don’t buy at the bottom of the range.

    In the next part of the table there are examples of indicators of diapason, they begin also from ADX. Then RSI and Stochastic go. If ADX is weak, and there is a significant technical resistance on the top (Fibonacci and Moving Average), and /or Stochastic is in overbought or oversold zone, it shows the character of a range of price movement.

    Expected deals

    In this part of the journal you’d better mark the deals you are planning to make on the basis of the analysis made. Mention here:

    - Conditions for opening the position

    - Levels of stop-losses with reasons

    - Aims to be reached

    Opened and closed positions

    This part of the journal is mostly contributes to self-control and gives an opportunity to analyze your actions. As a rule it consists of:

    - Character of the deal

    - Stop-loss with reasons

    - Result of the deal (date and reason of closing, financial instrument)

    - Comments

    Author Ruslan Shambasov
    Article link http://blog.masterforex.org/?p=738&lang=en#more-738
     

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