The Value of a Long Term Record

Filed under: Learn Forex Trading |

 

In the world of forex trading, record keeping is invaluable. Why is this? Well, there is no better gauge of whether your system or methodology has merit than your own personal trading record. Backtesting is only useful to an extent, and there is nothing like live trading to test a system or method.

 

The best way to record your trades is to create an excel spreadsheet and write down the details of every trade that your make (especially the profit/loss figures!). By doing this, you can create along term record and create a visual record of your equity curve. Of course, MT4 does all of this for you already – so why would you do all of this extra work? Well, you can do some pretty neat things in excel to analyze all of your data once you have made a significant amount of trades. You can find correlations between variables, you can work out which pairs and which timeframes have been the most successful, all of which could prove to be very useful to you in fine-tuning your system or methodology.

 

If you write down each trade as you go, it will not seem like any work at all. But if you decide you want to do this at a later point when you have already made hundreds of trades, then it will be a very time consuming and laborious task indeed.

 

At the end of the day, the longer your trading record, the more confidence you will have to make more trades (providing that you have been profitable!). In the short term, anyone can have the good fortune to be profitable, but over a very long series of trades, luck becomes less of a factor, and a trading edge is revealed.

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