What is a Trading Journal?
Oct 28, 2020 in Fundamentals

What is a Trading Journal?

By: J. H. Liverstone

A trading journal is a tool where you enter your trading data to analyze your performance and behavior then receive actionable tips about what to change to improve your trading results. The entries in your trading journal may include details about your trades (entry price, close price, date, time, ...) notes on the system you used for the trades, setups, and charts.

We’re not talking “dear diary” here. A trading journal contains data that you can analyze and use to keep improving. And if you are like me, you probably understand how important is to have data about your trades and your trade routines.

How do I create a trade journal?

There’s more than one way to keep a trading journal. Some traders use a note-taking app, others use Excel or Google Docs. Some use a specific trading-related application.

For instance, I keep track of my trading using an online trading journal app where I can easily dig through data and get answers to my questions.

But the most popular choice is Excel or an online Trading Journal App because this lets you add your trades easily and can provide answers for questions that can help you improve.

How can a trading journal help me?

A trading journal isn’t just about writing in the prices of your entry and exit and the time you executed the trade.

The trading journal is also about refining your methods and improve your trading system. It is one of the most effective tools for performance management and has lots of benefits.

Let me tell you a few of the benefits a trading journal can provide if you know how to create one and use it properly.

5 Benefits of using a Trading Journal:

  • A trading journal helps you identify your Strengths and Weakness
  • A trading journal helps you identify your Good or Bad setup
  • It helps you find your Edge in the market
  • Helps you with Risk Management
  • Helps You Set up Incremental Goals

You can read more about the benefits of a trading journal in this article 5 Benefits of using a Trading Journal

What do I include in my Trading Journal?

If you want to create your own Trading Journal using software like Excel I suggest starting tracking simple data points not to overwhelm you. These points are the following but not limited to:

  1. Entry Price
  2. Exit Price
  3. Number of Shares
  4. Date and Time - Of each execution
  5. Entry Reason - Why you took the trade
  6. Target – How much do you expect to make
  7. Stop – How much are you willing to lose
  8. Conditions – What were the market conditions at the entry-level
  9. Lessons – Did you learn anything from this trade
  10. Setups – Based on which setup/strategy you took the trade
  11. Mistakes – Did you made any mistakes on this trade

With this, you can calculate your Win %, Loss %, Avg. Winner, and other core metrics. If you want to go deeper and have more stats you need to add more data.

Remember, you are the one who’s going to benefit from writing a trading journal. So write down what you think you would benefit the most from!

The other option here is to use an online trading journal like AntSignals. The advantage is that AntSignals tracks everything for you offers great visualizations to easily identify patterns and mistakes plus detailed reports.

Conclusion

I hope now you know what a trade journal is, how can you benefit from keeping one, and what to include if you decide to start one, which I hope you will do after reading this article.

Happy trading…

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