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What is a trading journal?

Guide

Money & psychology4 min

What is a trading journal?

A trading journal is a record of every trade with the reasoning behind it — setup, entry, stop, target, size and the outcome. Its value is not the record itself but the review: patterns in your own behaviour only become visible once they are written down.

What to log

Your broker statement already has the numbers. What it cannot tell you is why you took the trade, so the journal's job is to capture the decision, not the fill.

  • Instrument, direction, date and session
  • Setup name — the specific reason for entry
  • Planned entry, stop, target and position size
  • Actual entry and exit, and any deviation from the plan
  • Emotional state in one word
  • A screenshot of the chart at entry

The review is where the value is

Logging without reviewing is bookkeeping. Once a week, group trades by setup and answer three questions: which setup made money, which lost it, and where did you deviate from the plan.

Example

Twenty trades over a month: setups A and B are net positive, C is net negative and accounts for 70% of losses. Dropping C alone turns the month around — a conclusion that is invisible without the log.

Metrics worth tracking

  • Win rate and average R multiple per setup
  • Expectancy — average result per trade in R
  • Maximum drawdown and the streak that produced it
  • Percentage of trades that followed the plan exactly

Keeping it sustainable

A journal you abandon in three weeks is worth nothing. Six fields and a screenshot, filled in at the moment of entry, beats an elaborate spreadsheet you stop updating. Add complexity only when the simple version has already changed a decision.

Risk/reward calculator

Log the planned R on every entry so the review has something to measure.

FAQ

Common questions

Do I need a journal if I trade rarely?

Especially then. With few trades, memory is the only alternative record, and memory reliably rewrites the reasoning after the outcome is known.

Spreadsheet or dedicated app?

Either. A spreadsheet is enough for most traders; apps mainly save time on statistics and screenshots.

How long before a journal is useful?

Usually 30 to 50 trades, which is the point at which per-setup results stop being noise.

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