Organization is something I have consistently noticed lacking by many forex traders I have met over the years. Not that it should come to much surprise, but people tend to want to just push the pedal to the floor and get going when it comes to execution. There have been few practices I have witnessed that truly help people come to grips with pure price action than taking stock of behaviors they witness on a regular basis.
Application Is Still The Best Form Of Education
I, like many others, are under the belief that you can read as many books or articles as you like, but nothing is going to get you moving forward faster than just raw observation. The problem is that we tend to forget what causes us to prevail or conversely, get burned, by the market. Why this is the case with trading and not as much as other activities can be explained in 500+ page documents, but just be aware that we DO forget many things along this line, and on a very consistent basis.
Getting It Done Is Easy; Just Do It, That's All
1. Create a new folder on your computer that is as “in your face” and easily accessible as possible. For most people, this is going to be right on your desktop, or if you don't want to slow down your machine, create a desktop shortcut to a buried location, or one in your taskbar, or both. Easy access is key, otherwise you are just less likely to use it.
2. When you take a trade or observe something that could have paid off or caused some harm, grab a screenshot of the chart.
3. Mark up the chart with notes. Go nuts. The more information, the better, so you won't have to second guess the movement when you use it as a reference guide in the future.
Take stock of the following:
- Fundamental backdrop – is the risk on or off? What just hit the wires? Economic data? Rumor mill? Be specific.
- Technical backdrop – local and long term support and resistance levels, price patterns, fibonacci sequences etc.
- If you executed (or were going to and did not) exactly where and why?
- How far did price travel before major support or resistance got in the way?
Etc….the book is open. You are the author, after all.
You can distinguish movements by news events, volatile, non-volatile reactions, specific price patterns, etc. Just make sure that you are not overlapping too many categories which might be relevant to one another.
Use your downtime to browse through your charts and stay sharp when it comes to “normalized” market movements. Most of time, you are likely to open your folder for viewing right before an event or other potential movement.
In both Windows and Mac operating systems, you have the ability to take screenshots and paste them into other editing programs. I used to do this with Widows before I found SnagIt.
SnagIt has been the best piece of software I have used when it comes to taking “screen notes”. It's a $50 purchase but in my opinion, well worth the money. It is very easy to use and saves me the hassle of having to battle the Windows interface and cropping images, etc., in other programs. Everything can be done in SnagIt, and there is no cropping to speak of when it comes to grabbing the shot. Again, ease of practice is key…..if it is hard to do, you are simply less likely to do it. Make it easy.