Tracking Your Trades

The Importance of Tracking your Trades

Tracking of trades is something that every trader should be able to do in the right way and with the right tools. The steps to tracking of trades should follow this format:

a)    Monitoring the market for trade opportunities

b)    Detecting Trade Opportunities

c)     Tracking of active trades

d)    Monitoring the market for possible reversal signals

Tracking the Market for Trade Opportunities

On any typical day, a trader can track the market for trade opportunities. This is where with the complete arsenal of fundamental and technical analytical methods, the markets can be scoured for opportunity. A typical way to start tracking the market for trade opportunities is to visit sites like actionforex.com, ino.com, etc. These sites provide what in forex is known as action analysis. In other words, these sites tell traders what is currently hot, what is heating up and what is cooling off. These websites are not the only ones to provide such information. Bloomberg TV, CNBC and CNN Financial News are TV stations where you can get market insight by listening to experts. I have once pulled off a great trade on the decision of the ECB to start purchasing Eurobonds in the height of the Eurozone sovereign debt crisis simply by listening to a currency analyst on Bloomberg piece the possible trade plays together in 15 minutes.

parabolic sar strategy forex4

A lot can also be gained from the charts and from software plug-ins. For instance, the Autochartist web-based chart indicators are a tool I use to look at the market for trade opportunities. The chart pattern indicator from Autochartist actually shows the trader which patterns are evolving in the market. Below is a sample of a trade opportunity displayed in the web-based Autochartist platform.

(chart)

Now while all signals from here are not always accurate, the visual and sound alert system allows the trader to get a heads-up moment, and critically study a chart that may have gone unnoticed or passed under the radar. This opens the way to take advantage of the next stage.

Detecting Trade Entry Points

By the time the trader has conducted a market scan and found a possible trade opportunity, then it is a good idea to look at the entry parameters and set a form of alert on it. For instance, a trader who sees a pattern that should end in a breakout is best served setting an alert to trade on the mild throwback that will occur following the initial breakout candle. One way to do this is to get a programmer to create a form of sound or email alert system which alerts the trader that the entry parameters have been met and that the trade should be taken. I have a smartphone which always alerts me to a new email or any of such alerts. You should have one too.

Tracking of Active Trades

The active trades in the market can also be tracked for performance. That all the analysis has been done and the trade executed and moving in the right direction does not always mean it will hit expected targets. A sudden and unexpected fundamental push could reverse the position in a matter of seconds and turn a trade with unrealized profits into a full-scale realized loss.

What this means is that sometimes it may be necessary to re-evaluate trades to see if the targets are still tenable. The best way to do this is to ensure that your trades are trackable on mobile devices. So you need to download your broker’s platform as an app on your smartphone or tablet device. This allows you to take your trades wherever you go to ensure that trades have not reversed against you.

Detecting Trade Exit Areas

One consequence of tracking active trades is that you would be able to tell if trades are going your way to the end, or if you may have to re-evaluate your exit areas. These can make all the difference between profits and extreme losses.

Tools for Tracking Your Trades

The following tools are required if a trader is to be able to appropriately track forex trades.

a)    An internet connection.

b)    A smartphone/tablet device to enable the trader log on to the platform and assess trade opportunities, active trades and possible trade exit points.

c)     Access to action insight. This would require devices which can log on to satellite TV. In Africa, Multichoice has a device known as the WALKA which looks more or less like a tablet device, but is used solely for playing their premium satellite channels. There are similar services in America, Europe and Asia. Action insight can also be obtained from some of the websites we mentioned earlier.

d)    Alert software which are able to tell a trader via a phone or email alert that a trade entry or exit opportunity is in the making.

When all these tools are put together, no longer will you miss opportunities when they come. This is the whole essence of tracking your trades.

Adam

More About

Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

View Posts - Visit Website

Leave a Reply