Trading Journal

What is a trading journal?

A trading journal It is a very powerful tool for a trader, with which we can polish our operations until practically reaching excellence. It is one of the most essential parts of our daily routine and even if you think you don’t need it, because you dominate the system and the market perfectly, I assure you that sooner rather than later, you will need to keep a trading journal because it gives us a lot more information. Hopefully it will be soon for the sake of your account. In this trading diary we will find all the data related to the operations and you will check if you really respect the rules of your system in each situation, or on the contrary you improvise depending on your feelings. One thing is the plan we have before entering the market and another is what we really do when the price starts to annoy us.

How to keep a trading journal?

The man (and more the trader) is the only animal that stumbles twice on the same stone. In trading, we can avoid this destructive habit in a more than simple way. In order to determine what we have done wrong in our trading, we need to keep track of all trades made with our trading system. You may think that by taking a look at the operation the lesson is already more than learned, but this is not the case because in this way at the end of the week you will lack a lot of information about your operation. Our memory tends to warp memories so that most of the bad things are erased. Therefore, it is more than important to keep a trading journal.

In order to be able to draw conclusions from the operations carried out, we must include all the details in the Trading journal. The more the better. You must take the part of the trading journal, as a part of the work that a trader must do, as important as the analysis, the operation or the management. As an example, our trading journal should include all of these data:

  • Exact date and time of the beginning and closing of the positions.
  • Instrument (Currencies, Futures, Stocks, etc).
  • Type of trade: Trend, bounce off support or resistance, major level breakout, pullback, etc.
  • Signals by which I decide to trade: 4h pattern, 15m structure breakout, pinbar candlestick, dogi with volume, etc.
  • Entry levels, Stop Loss and target profit (profit).
  • Trade direction: buy (long entry) or sell (short entry).
  • Full position or split into partials. That is, if we have been taking part of the benefits when the operation was going in our favor.
  • Result of the operation: Pips, percentage and money.
  • Impressions: did I get into the trade well or did I jump a bit? Have I checked all the details? Have I controlled the volume, and the Japanese candlestick patterns correctly?
  • Psychotrading: sensations while in the market (tranquility, tension, bad or good vibrations, emotional state, etc. This is or more important to control in your trading.

Possibly we can include something else in this trading journal, but with this data, we already have enough to be able to draw conclusions when evaluating our trading, and if we have made a mistake or can improve something.

Trading journal routine and review

You don’t need to check the trading journal every day. If we have a quiet time during the weekend, it would be perfect to be able to do an in-depth analysis of your operations and get as much data as possible. Most likely, we will find small details that we did not take into account, although we will also find large errors, which it will be incomprehensible for us not to have noticed. That is why it is so important to analyze your trading journal and collect as much data as possible. These errors that we are going to classify as “big shit” that have cost us money, are the ones that we must write down somewhere visible, so that when we are operating we will keep them very much in mind and avoid incurring them again. It is very important to be aware of the mistakes we make. We may make different mistakes, but repeating the same ones can create very unhealthy habits for our trading.

You can keep your trading journal by creating an excel template (in the Traders Business School courses we have an Excel template to keep your trading journal) or if you prefer, do it in paper format. Choose the way that is most comfortable for you. The important thing is that you can analyze all your operations in a clear and simple way. In addition to your trading journal, we We link our students to the account with which they begin to operate with our systems with the website, where all your operations are automatically recorded, where you can consult very interesting graphs and statistics of your movements. This helps us to see the evolution of the operation of all our students in a very precise way.. We analyze their evolution, which systems they are using best, which currency pairs are the most effective, and even which times and days are the ones with the highest percentage of reliability and profit factor in all their operations.

Remember as a trader the importance of learning from mistakes. A trading journal is a simple tool to build, but highly effective. In fact, it is the only way I know of to move towards profitable trading. Remember to fill in your trading journal every time you make a new trade, whether it is when you make or lose money. It is a job that will take you a few minutes, but over time, this analysis will become the solid foundation on which to build a consistent trade with which you can earn money.

Sounds interesting to you, right? Keep learning trading with DTP with upcoming articles on our Blog.

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