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Trading Journal – Your Diary of Profit and Loss and Lessons Learned

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One of the major factors that separate successful traders from unsuccessful traders is that successful traders examine and look at each trade as an opportunity to learn and grow. Whether the trade is profitable or not, each trade is examined, as to why it is either making a profit or losing money. These traders often can do so by using trading journals.

Trading Journal 1

Using trading journals is basically noting down your journey in trading. It is some sort of a diary. It can be as simple as writing down your details in a book, on a Word document, or to have more formatting in an Excel sheet. It therefore is a way to measure, track and record on your trading performance through time.

Trading Plan vs. Trading Journal

A trading plan goes into details on your approach and methodology of trading, while a trading journal records the actions that you have taken.The major difference of a trading plan is that most of it happens before you start trading, while a trading journal is recorded after you have traded.

Trading Journal 2

Here are some questions to guide you on what to write in your trading journal:

Trade Details

Specify your reasons for entering and exiting a trade. Include the details of the trade entry’s date, time, price and whether it’s a long or short trade.

Fundamentals – What’s Affecting The Trade

Specify the market conditions during the trading day.

Example:Is the market experiencing unusual trading volume, or unusual volatility? Is it a ranging or trending market conditions?

Specify the (probable) causes that could have affected the market conditions during the trading day from the time the market opens until it closes.

Example:Did any news cause a sudden reversal in the market?

Money Management

What kind of money management are you utilizing?

Example:How much percentage of capital are you preserving?

Technical Analysis

What technical indicators charts were you when entering a trade?

Lesson Learned

Note down your weaknesses and strengths during the trading day – in what way and where were you weak/strong during the trading day? What did you learn and what are you going to do with your weaknesses/strengths?

Note down any other opinions you may have, for example, how did you fare generally during the trading day?

You can also keep your trade logs in Microsoft Excel to review what you have done.

Here are some variables of the columns you can setup:

  • Trade
  • Date
  • Symbol
  • Long/Short
  • Quantity
  • Bought
  • Sold
  • Commission
  • Profit & Loss (Including commission)
  • % Profit & Loss
  • Comments

These are basic details you can use to log your trades. You can further add anything that is relevant to your own trading style.

Click Here To Download A Trading Journal Template

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