When you trade forex you need to be measuring your performance. If you are not measuring your performance then you will not be able to determine your success. There are a number of different points in your trading that you need to consider. These points will include the consistency of your trading and the actual profits that you are making. When you measure both of the points you are going to get the most out of the market.
How to Measure You Forex Trading
A problem that a lot of traders have is that they do not know how they should be measuring their trading. The measurements that you are going to use and the method that you use will vary depending on what you are measuring. When you look at the consistency of the forex trading then you need to use your forex trading journal and compare your trading to your strategy. When you are looking at the actual profits that you have made you need to take what you made and get rid of what you have lost.
Measuring Your Consistency
The one point of you trading that you need to look at is the consistency with which you trade. When you trade consistently you are going to be trading according to your trading strategy and not diverting. The more consistent you are in your trading the more you are going to be able to make. This is due to the act that you will be able to replicate all of your profitable trades.
Your forex trading journal is the tool that you need to measure the consistency of your trading. You should look at all the trades that you have done in the time period that you are measuring. You need to make a note of the number of trades that are completed according to your trading strategy. You also have to make a note of all the trades that have been completed with a diversion from the strategy. Once you have these numbers you should compare them.
If you have a higher number of strategy trades then you are being consistent in your trading. However, if the number of diversion trades is greater then you are not being consistent.
Measuring Your Profits
When you look at measuring your profits you need to look only at the realised profits that you have. This means that you are looking at only the trades that have been closed. Looking at the trades that are still open will distort what you are measuring because these trades can still go either way.
To do this measurement you need to look at the profits and losses that you have made for the time period you are measuring. You need to add up all of the profits and all of the losses, but you should not combine them. Once you have the total profits you have made and the total losses you have made you can then continue. When you have these totals you should remove the losses from the profits. This will give you the net profit that you have made. If this is a positive number then you are profitable in your trading. If this is a negative number then you are actually making a loss.