A trading journal is a record of what you did and why. Used well, it is the most reliable way to see what you actually do, which is often not what you believe you do.
Judge process, not outcome
A trade can be a good decision that loses, or a bad decision that wins. If you only record profit and loss, luck and skill look identical. So record whether you followed your plan as a separate yes or no, and review that figure as closely as the money.
What to record
For every trade:
- Date, market, direction and timeframe.
- The setup from your plan and why you took it.
- Entry, stop, target, size and risk percentage.
- The result in R.
- Did you follow your plan? If not, what happened?
- How you felt before and after.
- One thing you would change.
You can download a ready-made template from the free resources page.
Weekly review
Once a week, look for patterns rather than single trades:
- Which setups produce your best and worst results in R?
- Are your losses roughly what you planned, or larger?
- When do you break your rules: after a win, after a loss, late in the day?
- How often did you take trades that were not in your plan?
Avoiding common traps
- Outcome bias: judging a decision only by its result.
- Selective recording: skipping entries for trades you are embarrassed about. Those are the most informative.
- Too much detail: a journal you stop keeping is worth nothing. Keep it quick.
Be kind, be honest
A journal is not a way to punish yourself. It is evidence you can use to change what you do next.