How Do Grid Trading Strategies Work?

Economic

Forex

Summary:

Grid trading stands as a distinctive strategy within the trading realm, offering a structured approach to navigating market volatility. By strategically placing buy and sell orders at predefined intervals, this method eschews the need to determine the market direction, instead harnessing the inherent fluctuations of the market.

Understanding Grid Trading

Grid trading is a strategic approach to forex and other financial markets, where traders place buy and sell orders at predetermined intervals above and below a base price, creating a grid of orders. This method does not require traders to determine market directions but instead relies on market volatility to generate returns. The essence of grid trading lies in its relative simplicity and in leveraging the natural ebb and flow of price movements.

At its core, grid trading involves setting up a sequence of orders that are triggered when prices hit certain levels. The strategy is designed to take advantage of normal price volatility within a specific range or trend by entering and exiting trades at predetermined levels. For instance, a trader sets up a trend-following grid on EUR/USD, placing buy orders above the current price at regular intervals and sell orders below. As the trend progresses, orders are activated, and the trader aims to capture returns from these movements.

A critical advantage of grid trading is its flexibility. It can be adapted to suit various market conditions, whether the market is trending or moving sideways. In trending markets, the grid can be adjusted to follow the trend, potentially increasing returns as the price moves in a specific direction. In range-bound markets, the grid capitalises on price reversals at each level.

However, grid trading also requires careful risk management. The nature of the strategy means that without proper oversight, adverse market movements can lead to significant losses. Setting stop-loss orders for individual trades and monitoring overall exposure are essential practices to mitigate these risks.

Grid Trading: An Example

Consider a trader who decides to employ a grid trading strategy on the EUR/USD pair, observing that it has been fluctuating within a tight range of 1.1000 to 1.1100. The trader selects 1.1050 as the base price, identifying it as the midpoint of the current trading range.To set up the grid, the trader places buy orders at intervals below the base price, for example, at 1.1040, 1.1030, and 1.1020. Simultaneously, sell orders are placed at intervals above the base price, at 1.1060, 1.1070, and 1.1080. The strategy here is to capitalise on the currency pair's natural price movements within this established range.

As the price fluctuates, hitting each buy order triggers a purchase at a lower price, aiming to sell as the price rebounds. Conversely, each sell order executes a sale at a higher price, buying back the short position as the price drops again.A stop loss is typically set beyond the range’s upper and lower bound, while profits may be taken incrementally as the price fluctuates around the midpoint. Properly managed, this approach allows the trader to systematically generate returns in a range-bound market without needing to determine the direction of the next price movement.

Grid Trading Strategies

Broadly speaking, grid trading strategies come in two flavours: range-based and trend-following. Below, we explore both.

Range-Based Grid Strategy

In a range-bound forex or cryptocurrency* market, where prices oscillate between a defined high and low, a basic range-based grid strategy might be quite effective. This approach leverages the market's natural tendency to fluctuate within bounds, allowing traders to capitalise on small, consistent movements rather than large trends.

Identifying a trading range is the first step, where the trader marks the highest and lowest prices over a certain period. From this range, the midpoint is determined, serving as a reference for setting up buy and sell limit orders.Typically, traders might choose to place four or five orders on either side of the midpoint, though some may select more. The spacing between orders is calculated by dividing the distance from the midpoint to the range's high or low by the number of orders, adjusting the spacing slightly.

Entry

● Buy orders are placed below the midpoint at intervals determined by the spacing calculation.

● Sell orders are set above the midpoint, also spaced according to the initial calculation.

Stop Loss

● Stop losses for each order are placed just beyond the range's established high or low to protect against significant market moves outside the expected range.

Take Profit

● According to the theory, traders prefer to take profits as price reaches the opposing order.

Trend-Following Grid Strategy

In a trend-following grid strategy, the primary goal is to align with the market's direction, leveraging sustained movements to accumulate a position that grows as the trend progresses. This approach requires the trader to first identify the prevailing trend, which can be achieved through market structure analysis or the use of indicators such as moving averages, momentum indicators, or the Average Directional Index (ADX).

Upon determining the trend, the current price acts as a base from which buy stop (in an uptrend) or sell stop (in a downtrend) orders are placed at fixed intervals. The intervals may vary depending on the trader’s preference; a popular method involves using the Average True Range (ATR) to set these distances.For example, if using the ATR, a trader might place orders at intervals of 2x the ATR value from the base price, utilising the ATR’s reflection of market volatility to gauge appropriate spacing between orders.

Entry

● Orders may be placed in the direction of the trend at intervals determined by the trader, such as a set number of pips or a multiple of the ATR from the base price, enabling a balanced expansion of the position as the trend continues.

Stop Loss

● Setting a stop loss in a trend-following grid strategy varies; some traders prefer to trail a stop loss beyond the last entry point to protect gains, while others set it just beyond the base price to guard against sudden reversals.

Take Profit

● Profit-taking can be challenging in a trend-following grid; according to the theory, one approach is to close all trades after a predetermined number of orders are reached (e.g. if using four orders, closing the trade when the fifth order is reached), effectively capturing returns before a potential reversal.

● Another method may be to take profits upon the opening of the next order in the sequence, which limits both potential gains and losses while reallocating capital for future trades.

Risk Management in Grid Trading

Risk management is a critical aspect of grid trading, where the systematic approach to placing multiple orders can potentially amplify both returns and losses. Given that grid systems compound entries, the disciplined use of stop losses becomes essential to cap potential losses. This is particularly true in volatile markets. When grid trading in cryptocurrencies*, for example, rapid price movements can quickly leave a trader overexposed without careful risk management.

Another crucial consideration is the spacing between orders. Properly calibrated spacing can help manage exposure by preventing the accumulation of too many positions too quickly in a market that is moving against the trader's assumptions. Similarly, the sizing of each trade must be carefully considered to not only manage exposure but also ensure that margin requirements are met without overleveraging the account.Diversification across different instruments or markets is also an important part of a grid strategy. By not putting all eggs in one basket, traders can potentially reduce the impact of a significant move in any single market.

Many grid trading strategies are automated, allowing for the execution of this strategy at a scale and speed that would be challenging manually. However, using grid trading bots introduces its own complexities, including the need for constant monitoring to ensure that the algorithm behaves as expected in changing market conditions. It also requires a robust understanding of the automated system's parameters to avoid unintended exposure.

FAQs

What Is Grid Trading in Forex?

Grid trading in forex is a strategy where a trader places buy and sell orders at predetermined intervals around a base price. It capitalises on the natural market volatility by automatically executing trades without the need to analyse market directions. This approach is designed to generate returns from the fluctuations of financial assets.

How Does Grid Trading Work?

Grid trading works by setting up a network of buy and sell orders spaced at regular intervals above and below a starting price point. As prices fluctuate, these orders are triggered, potentially allowing traders to take advantage of small price movements. The strategy can be adjusted for different market conditions, aiming to continuously enter and exit trades based on the established grid pattern.

What Is Spot Grid Trading?

Spot grid trading is a specific application of grid trading strategies in the spot market, where financial instruments are bought and sold for immediate delivery. In forex, it refers to buying and selling currency pairs at their current market price, using a grid strategy to take advantage of spot market volatility.

What Is a Grid Trading Strategy?

A grid trading strategy is a systematic method of placing a series of orders at incrementally increasing and decreasing prices. This strategy is designed to execute trades automatically as the market moves, aiming to secure returns from these movements without needing to determine the market's direction.

How Risky Is Grid Trading?

Grid trading can be risky due to its potential to compound losses, especially in highly volatile markets. The strategy requires careful management of stop losses, order spacing, and trade sizing to mitigate exposure. While automation of grid trading can help manage these risks, it also introduces the need for constant monitoring and understanding of the system to prevent significant losses.

Source: FXOpen

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Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Adam

Economic

Italy's tax take is rising faster than expected thanks to job growth and inflation, putting the budget deficit on track to dip below the European Union ceiling of 3% of gross domestic product in 2025, a year ahead of schedule.

Tax revenues rose by more than 16 billion euros ($18.76 billion) between January and July, 5% higher than in the same period last year and outpacing the expectations of the Italian Treasury, which in April forecast a 0.8% increase for the full year.

The government had estimated a deficit of 3.3% of GDP in 2025, but the extra taxes mean the fiscal gap will probably be significantly lower.

Prime Minister Giorgia Meloni and her right-wing allies are claiming credit for the stronger numbers, yet economists say the upswing has been caused by phenomena not necessarily tied to the government, which took office in late 2022.

ARITHMETIC OF ITALY'S TAX TAKE

Tax evasion reforms introduced over the years are bearing fruit, analysts say, although much of the heavy lifting is down to inflation-driven fiscal drag and the creation of some 2 million new jobs over the past four years that have boosted tax receipts.

"Job growth boosts both tax revenue and GDP, but tax revenues grow faster than GDP since employment is taxed much more heavily than other kinds of income," said Marco Leonardi, economics professor at Milan's Statale University.

Meloni frequently points to the job growth as an achievement of her government, but never mentions the fiscal drag - a simple economic phenomenon where inflation and nominal pay growth raise the proportion of taxes paid on income.

Leonardi estimated that the state had collected an extra 25 billion euros from 2021 to 2024 thanks to this effect, with more cash piling up this year, outpacing limited tax cuts introduced by Meloni so far.

Consumer prices in Italy rose by 19% between 2020 and this year. Wages have risen in nominal terms in recent years too but by less than inflation, leaving ordinary Italians feeling worse off. Italian salaries adjusted for inflation are below the level of 1990, data by the OECD and Italy's national statistics bureau ISTAT show.

"The government says it has passed billions of euros of tax cuts, but the impact on our pay packet seems minimal or inexistent. Meanwhile, prices remain high," said Veronica D'Amato, an office worker from Rome.

In Germany, by contrast, the government shifts income‑tax brackets each year to offset fully the impact of inflation.

France has seen no tax windfall this year, partly as a result of more modest employment and consumer price growth than Italy, and faces a 2025 budget deficit of at least 5.4% of GDP.

RISING TAX COMPLIANCE

Italy's sturdier accounts are also a reflection of new rules introduced progressively since 2011 that have narrowed the scope to evade taxes, with successive governments pushing traceable digital payments and tightening controls.

Tools now in place include expanded e‑invoicing, real‑time VAT reporting, penalties for retailers that refuse card payments, and heavy use of data matching across state systems.

"In my field, the level of evasion has definitely declined in the last 20 years," said Martina Di Egidio, a Rome architect.

She cited a national digital platform introduced around a decade ago where all applications for building work must be uploaded as one measure that curbed evasion.

Giacomo Ricotti, head of the Bank of Italy's tax department, told parliament last week that tax evasion fell from 97 billion euros in 2017 to around 72 billion in 2021, the most recent data available.

Fitch ratings cited "rising tax compliance" among the factors behind its decision on September 19 to upgrade Italy's credit rating.

MELONI FIGHTING OR ENABLING TAX EVASION?

Yet Italy's long-running fight against tax fraud is still far from won, with critics pointing the finger at Meloni for some setbacks.

Soon after taking office, she partially softened past crack-downs on evasion by raising a limit on cash payments to 5,000 euros from 1,000 and offering numerous tax amnesties allowing people to settle their disputes.

The European Commission says that in Italy the VAT compliance gap, which measures estimated losses from fraud and evasion, widened by roughly four percentage points in 2023 from 2022, reversing a tightening between 2020 and 2022.

Brussels linked the higher compliance observed during the pandemic to home renovation incentives that taxpayers could access by declaring work. Meloni has almost entirely phased out these programmes, given their massive costs for state coffers.

The government says its strategy is focused on targeted tax audits to avoid hitting honest taxpayers and on pre-emptive agreements with companies on their future tax bills. Meanwhile, the co-ruling League party is piling pressure on Meloni to adopt a further, large-scale tax amnesty.

Italy's tax burden remains stuck above 42% of GDP, higher than the EU average of 40% -- a statistic that opposition parties say belies repeated claims by the coalition that it is slashing taxes.

With national elections due in 2027, Meloni is looking to cut income taxes for those earning between 28,000 and 60,000 euros a year, politicians said.

"It's time to give an important signal for a reduction of the tax burden on the middle class," said junior Treasury Minister Federico Freni.

Source: Reuters

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Risk Warnings and Disclaimers

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Olivia Brooks

Central Bank

Economic

Political

Piper Sandler warned in a note Monday that a potential U.S. government shutdown could delay key economic releases, but stressed there are “plenty of other data to gauge labor, inflation, etc.”

In its weekly research note, the firm said “there’s concern that if there’s a government shutdown, important economic data will be delayed, e.g., payrolls (scheduled to be released Oct 3rd), and the CPI (Oct 15th). Well, they will eventually be reported … but with a lag of perhaps 10 days after the reopening.”

In the meantime, Piper Sandler pointed investors to a wide range of private and alternative data.

“Sep 30: Conference Board’s jobs hard-jobs easy, which correlates very well with the unemployment rate,” the analysts wrote.

They added that the Oct. 1 ISM and S&P Global PMIs would provide critical labour and inflation signals, noting their price components have been “consistent with inflation cooling a bit.”

The firm highlighted other key indicators: mortgage applications on Oct. 1, ADP employment data, weekly jobless claims on Oct. 2 and Oct. 9, and industrial production on Oct. 10.

Piper Sandler emphasised that “unemployment claims WILL be reported, as they were during the 2013 shutdown,” and warned they would likely rise if federal workers are furloughed.

Later in October, the NFIB small business report (Oct. 14), Empire State and Philadelphia Fed surveys (Oct. 15–16), and NAHB housing index (Oct. 16) will offer further insights.

Piper Sandler also said it would “watch our Daily consumer confidence survey to gauge how consumers see any shutdown.”

Source: Yahoo Finance

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Adam

Economic

What happened last week

New tariffs announced: The US will implement substantial levies effective 1 October, comprising 100% tariffs on branded pharmaceuticals, 25% on heavy trucks, 50% on kitchen cabinets, and 30% on upholstered furniture. Europe and Australia bear the primary impact on pharmaceutical exports, whilst Mexico and China represent the principal trading partners affected in trucks and furniture. This policy initiative may intensify US-China trade tensions ahead of the truce expiration on 10 November.

US government shutdown: Congressional Democrats and Republicans face a 1 October deadline to avert a government shutdown, with challenging prospects as President Trump declined negotiations with Democrats, characterising their healthcare funding requirements as 'unreasonable'.

Resilient US economy: Second-quarter gross domestic product (GDP) growth was revised upward from 3.3% to 3.8%, whilst durable goods orders expanded 2.9% month-on-month, significantly exceeding consensus of -0.5%. Initial jobless claims indicated corporate reluctance to implement redundancies. These indicators provide compelling evidence supporting Federal Open Market Committee (FOMC) members advocating measured approaches to interest rate adjustments.

Russia-Ukraine conflict intensifies: The Kremlin declared 'no alternative' but to continue operations following Trump's policy shift supporting Ukraine's territorial recovery. Russia rejected this prospect while proposing tax increases for defence expenditure. Ukraine escalated drone strikes on Russian energy infrastructure, with Russia's NATO airspace violations heightening European security concerns.

Markets in focus

US equities retreat as valuation concerns mount

Major US equity indices retreated from historic peaks last week, driven by profit-taking activities and mounting concerns regarding elevated valuations. The S&P 500 declined 0.3%, whilst the technology-focused Nasdaq 100 fell 0.5% and the traditional blue-chip Dow Jones returned -0.1%.

Corporate developments featured NVIDIA's commitment of up to $100 billion in partnership with OpenAI to deploy artificial intelligence data centres with 10 gigawatts of capacity. This follows similar arrangements between technology companies, including OpenAI's investment commitment in Oracle, which propelled Oracle's share price close to 40% in a single trading session. Analysts are expressing increasing concern regarding a potential AI bubble, as these circular transactions may create misleading perceptions of industry growth and artificially inflate technology company valuations.

The US Tech 100 experienced a pullback from historical highs last week as the relative strength index (RSI) reached 78, indicating overbought conditions. The index found support at the lower boundary of the ascending channel established from mid-May levels, suggesting a favourable position to extend beyond 25,000 towards the channel's upper boundary as Wave 5 under Elliott Wave theory. The 20-day moving average (MA) provides immediate support for any retracements at approximately 24,200.

Figure 1: US Tech 100 index (daily) price chart

as of 29 September 2025. Past performance is not a reliable indicator of future performance.

USD/JPY approaches 150 on divergent economic momentum

The USD/JPY currency pair briefly touched 149.95 on Friday, reaching its highest level in nearly two months, as the US dollar regained strength on resilient economic fundamentals. Second-quarter GDP growth, durable goods orders, and latest initial jobless claims data collectively demonstrate stronger-than-anticipated US economic performance.

Conversely, Japan's manufacturing sector contracted for the 14th consecutive month, with the September S&P Global Manufacturing Purchasing Managers' Index (PMI) declining to 48.4, below market expectations of 50.2. Consumer prices excluding fresh food in Tokyo, commonly utilised as a leading indicator of broader Japanese inflation trends, increased 2.5% year-on-year. Despite exceeding the Bank of Japan's (BoJ) 2% target, inflation has gradually decreased from May's peak of 3.6%, reducing urgency for a BoJ rate increase in October. Bond futures markets currently price a 35% probability for a rate hike, down from approximately 50% a week prior. The Japanese yen may experience heightened volatility ahead of the Liberal Democratic Party (LDP) presidential election on 4 October to nominate Japan's new Prime Minister.

USD/JPY finally breached resistance at 148.8 after multiple challenges since August. The currency pair now trades above all key moving averages, including the 200-day MA which significantly influences the pair's medium-term direction. For USD/JPY to confirm the reversal of the bearish trend established since start of the year, it must move back above the uptrend line established since April. Clearing this level may provide USD/JPY with substantial opportunity to challenge the recent peak of 150.9. Failure to clear this resistance would indicate resumption of range-bound trading between 146.8 and 148.8.

Figure 2: USD/JPY (daily) price chart

as of 28 September 2025. Past performance is not a reliable indicator of future performance.

Bitcoin faces pressure amid $3.2bn liquidation wave

Bitcoin continued its decline last week, driven by US dollar strength, diminished risk appetite, and significant liquidations of long positions.

Bitcoin spot exchange-traded funds recorded $897 million in net outflows between 22 and 26 September according to Coinglass. The cryptocurrency data analysis platform revealed liquidations of long positions exceeding $3.2 billion during the same period, indicating substantial market deleveraging. Options worth $22 billion expiring on 26 September contributed additional price volatility.

The options market lacks clear directional consensus, with open interest on the most popular call option expiring 3 October targeting the $122,000 level, whilst bearish positioning anticipates the cryptocurrency declining below either $105,000 or $100,000 on Deribit.

Following the breach below the 100-day MA, Bitcoin's technical momentum further deteriorated, with the moving average convergence divergence (MACD) indicator crossing into negative territory. This movement confirms our previous analysis identifying Bitcoin's entry into Wave C under Elliott Wave theory, with $107,232 serving as critical support. A rebound above this support level could potentially return Bitcoin to the recent high of $117,877. Conversely, failure to maintain support opens the possibility of testing the 200-day MA at around $104,300.

Figure 3: Bitcoin (daily) price chart

as of 28 September 2025. Past performance is not a reliable indicator of future performance.

The week ahead

The forthcoming week presents an exceptionally active economic calendar, with particular emphasis on Chinese manufacturing activity, US labour market dynamics, and Australian monetary policy decisions.

China's dual purchasing managers' index (PMI) readings on Tuesday assume critical importance as markets scrutinise whether manufacturing activity is able to sustain its recovery. The official National Bureau of Statistics (NBS) manufacturing PMI slightly improved to 49.4 in August, but remains in contractionary territory for the fifth consecutive month. Markets will closely examine whether recent stimulus measures and improving export conditions can propel the index above 50, signalling meaningful recovery in industrial activity. Failure to achieve expansion would intensify concerns regarding China's economic trajectory and potentially prompt additional policy support measures.

Australia's Reserve Bank of Australia (RBA) interest rate decision on Tuesday is expected to maintain rates unchanged at 3.6% following recent above-consensus headline inflation data and Governor Bullock's commentary on robust economic conditions. However, accompanying policy statements will be scrutinised for signals regarding future policy direction. Hawkish rhetoric suggesting prolonged restrictive policy could strengthen the Australian dollar, whilst dovish indications of potential future cuts might weaken the currency and support equities.

US employment data dominates the week's calendar. Wednesday's ADP employment change and JOLTS job openings data will provide preliminary insights into labour market conditions, whilst Friday's non-farm payrolls are expected to demonstrate modest recovery to 39,000 new positions after August's disappointing 22,000 reading. The unemployment rate is anticipated to remain steady at 4.3%, though any deterioration could reinforce expectations of at least two additional quarter-point Federal Reserve cuts. However, the release of key US economic data remains contingent upon avoiding a government shutdown on 1 October.

Figure 4: US employment data

Source: ig

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Damon

Economic

Pending sales of US existing homes rose in August to the highest level in five months, as falling mortgage rates gave a much-needed lift to the sluggish housing market.

An index of contract signings increased 4% last month to 74.7, according to National Association of Realtors data out Monday. The gain exceeded all estimates of economists surveyed by Bloomberg. During the hot housing market of the pandemic era, the index was well above 100.

The bigger-than-expected advance follows a similar surprise in purchases of new homes last month, suggesting the housing market may be in the early stages of breaking free of a years-long slumber. Mortgage rates have fallen to the lowest in a year at 6.34%, encouraging many Americans to get off the sidelines and others to finally list their homes for sale.

“Lower mortgage rates are enabling more homebuyers to go under contract,” NAR Chief Economist Lawrence Yun said in a statement.

That was especially true in the Midwest, where sales jumped nearly 9% in August, Yun said, which was the most since early 2023. Contract signings also rose in the South and West.

While the drop in mortgage rates is welcome, millions of Americans still have rates well below current levels and aren’t inclined to move, which has suppressed inventory and kept prices elevated.

Meantime, one of the lowest rates of hiring since the early 2010s is keeping a lid on job relocations and housing activity, according to a recent blog post by Odeta Kushi, an economist at title insurance giant First American Financial Corp.

Pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they’re sold.

Contract closings on existing homes fell slightly in August, and they’ve remained frozen in a lackluster range for the better part of the last two-and-a-half years, NAR data show.

Source: Bloomberg Europe

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FXOpen

Economic

Cryptocurrency

Forex

Stocks

For traders, keeping a trading journal is an important activity that helps them improve their trading skills. A trading journal is a systematic record-keeping tool that is used to document trades, strategies, and outcomes. It is a way to track performance by recording the entry and exit points, the reasons for entering the trade, and the results.

Types of Trading Journals

Here are three trading journal examples. You can choose a format that works best for you, whether it’s handwritten notes in a notebook, a trading journal online spreadsheet, or a specialised app. The key is to be consistent in recording your activity.

● Use a notebook. Simply record the details of each trade on a new page or divide the page into convenient columns.

● Create a spreadsheet to keep track of your trades. Consider including columns for the entry and exit points, reasons, and outcomes.

● Choose trading journal software from the multiple options available. Apps make it easy to record and analyse trades. Some popular ones include Edgewonk and Tradervue.

Benefits of Keeping a Trading Journal

Keeping a journal has several benefits. The most important thing is that by using this tool for self-analysis and learning, you can increase your chances of success in markets and make data-driven improvements. Let’s break down why it can be useful.

● Identifying patterns. By keeping a record, you can identify patterns in your behaviour. For example, you may notice that you tend to enter trades at certain times of the day or that you have a tendency to hold losing trades for too long.

● Learning from mistakes. If you review your losing trades, you may identify what went wrong and how you can avoid making the same mistake in the future.

● Tracking progress. A trading journal is a way to track your progress. You can see how much you’ve improved. It’s also a means to reflect on your decisions.

● Improving discipline. Recording your activities can help you improve your discipline. By stating the reasons for entering the trades, you hold yourself accountable for your decisions.

● Controlling emotions. A journal can serve as a therapeutic outlet to express your thoughts and feelings. This allows you to separate your emotions from your decisions and make them more logical and reasonable.

Whether it’s a forex trading journal or one for stocks, crypto* or indices, the benefits will be the same. The usefulness of keeping a record will be self-evident.

How to Keep a Trading Journal

It’s to be expected that over time, a journal will become an invaluable resource for improving skills, minimising risk and achieving more consistent effectiveness in the financial markets. The hardest part is getting started, although keeping a journal is actually easy. Here are the five steps you can follow.

1. Choose a Format

Decide whether you want to keep a physical trading journal book, use a digital spreadsheet, or employ specialised software. Choose a format that you’re comfortable with, and that aligns with your needs. If you’re using a spreadsheet or digital document, you can create a trading journal template that includes the key information you plan to record for each trade.

2. Record Your Trades

Record the details of each trade you make. You can include the date and time, as this information is essential for tracking the timing of trades and assessing how different market conditions may affect your decision-making.

Recording your strategy or approach is a great idea. Regardless of whether it is based on technical, fundamental, or combined analysis, be sure to state your methodology. You may also want to detail the risk management techniques you used, such as stop-loss and take-profit orders. On the TickTrader trading platform, you can find various tools for risk management. After using them, you can evaluate how effectively they protected your capital.

3. Record Reasons and Your Emotional State

Consider writing down the reasons that prompted you to enter the trade. What factors or indicators influenced your decision? For example, if you prefer currencies, did you enter the trade because of a certain technical pattern or a country’s GDP report?

Documenting your emotional state before and during the trade is also important. Were you confident, anxious or fearful? An honest self-assessment of your emotions is critical to identifying emotional triggers that can influence you.

4. Review Your Trades

Think about reviewing your trades and indicating the final result — profit or loss. Be sure to write down the actual numbers so that you can accurately assess your results. When documenting your trades, it’s crucial to remain objective. Do not justify bad decisions or self-glorify successful ones. The purpose of keeping a journal is to learn and improve.

You can schedule a regular review of your trades. This can be done weekly or monthly, depending on how often you trade. During these reviews, you are likely to find patterns and identify areas for improvement.

5. Be Consistent

Consistency is key. You can develop a routine for recording trades. Make sure you thoroughly document all of them, regardless of their size or perceived importance. If it’s too difficult to do this yourself, you can use an automated trading journal. This is a great solution for those who have a hard time making habits.

Final Thoughts

Keeping records of your trades is a way to have a structured and systematic approach to monitoring and evaluating trading activity. This leads to better-informed decisions and improved performance.By recording details of trades, strategies, emotions, results, and risk management techniques, you can gain valuable insights into your behaviour and patterns.

Source: FXOpen

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Warren Takunda

Economic

The price of gold climbed to a new record on Monday, rising above $3,850 an ounce in the afternoon in Europe, up more than 1% on the day.

Precious metals across the board surged, fuelled by a weak dollar and high uncertainty around funding for the US federal government.

On Monday, US President Donald Trump and the Republican Party are meeting with Democrats to discuss a short-term spending bill to avoid a government shutdown on Tuesday. Republicans need at least seven votes from Democrats to pass the legislation.

Uncertainty is high, which historically sees investors flocking into so-called safe-haven assets such as gold. The precious metal is a more stable option in turbulent times when other asset classes are far more volatile.

So far this year, gold has shown itself to be an investor favourite amid increased geopolitical tensions and trade uncertainties. Since January, the precious metal has gained over 45%, rising from $2,669 an ounce.

Other factors are also supporting gold prices, including expectations of further rate cuts from the Federal Reserve. On 17 September, the Fed lowered its target range for its main lending rate to 4% - 4.25%, and officials indicated that there could be two more rate cuts this year.

Lower rates tend to weaken the US dollar, in which gold is denominated, increasing the metal's appeal. This is particularly the case when other interest-bearing assets like bonds and savings accounts offer lower yields, following rate cuts.

"Now above $3,800, gold has also been boosted by central bank buying over several years, weaker demand for traditional safe havens like US government bonds driven by concerns over US deficits and trade policy, dollar weakness and geopolitical tensions, including conflicts in the Middle East and Ukraine," Mould added.

"The threat of a shutdown in Washington, as policymakers engage in tense negotiations ahead of a deadline at midnight on Tuesday, is yet another factor driving support for gold."