Trading Journal: Can They Improve Your Success?
A forex trader’s best weapon is a trading journal.
The most challenging part of being successful in trading is the learning process, but with journals to guide and optimize performance, it can be done faster than expected.
If you plan on achieving profitable results through your system, then keep track of everything important using a trading diary so that you’ll know where mistakes are made along the path towards success.
In this article, we will go through what is a trading journal and how you can benefit from them.
So let’s get started:
What Is A Trading Journal
Some traders like to keep trading journals.
These trading journals can help enhance trading success by helping the trader to track their trading patterns, trading habits, and trading progress.
Tracking trading progress can also lead to increased motivation for the trader.
Trading journals are a great way of setting trading goals and work towards achieving them.
A trading journal is not necessary in order to be a successful trader but could be very helpful for some traders.
Trading Journals Can Be Used To:
- Track trading performance accurately
- Track trading patterns
- Track trading habits
- Set trading goals
- Track trading progress
- Improve discipline and motivation
The above list contains several of the ways that trading journals can help improve trading success.
Every trader has their own methodology behind their own forex journal.
However, they are one of the foundations of accelerated learning and improving as a beginner.
How Using A Trading Journal Can Bring You Success
One of the best tips for forex trading for beginners is to get comfy writing a forex journal.
Most – average – traders think trading ends after you close your position.
However, the key performers, the ones that consistently perform are the ones that are obsessed with improving and optimising.
The average forex trader will plod along and gently increase their risk if they are doing well.
Maybe they will review their strategy every so often.
However, those who note every trade down and review their thoughts build an absolute treasure trove of reasons why and when to enter the markets again.
Mistakes are only mistakes if you do not learn from them.
By using a journal you can subconsciously pick up on something you are doing without realising that is costing you profits.
Having a trading journal is just one part of a well-oiled trading machine that can systematically improve your trading above the rest.
The trading journal is a central part of trading that can boost your trading performance.
Did you know trading journals can help you trade more effectively?
By recording trades, we’re able to see what works and what doesn’t work.
We can learn from our mistakes and make better trading decisions in the future.
Help identify trading behaviors at the time of the trade. This will help you understand what triggered your response and why. Helping you understand what was successful and not.
A trading journal can also help us gain confidence in executions by providing evidence that proves our trading strategies are working.
Record all your trades in a trading journal so you have a better idea of which strategies to implement in the future!
3 Things You Must Have in Your Trading Journal
A trading journal can help you to maintain trading discipline.
It’s a good idea to keep track of what trading mistakes you’re making, what trading strategies work and don’t work for you, and any trading tips that seem helpful.
Here are 3 things that every trading journal should have:
- Details about how you discovered the trade. This could explain a trigger signal from your strategy, a potential chart pattern forming, or what the price action is dictating.
- Details of where your entry price was, the stop loss you set, and the take profit level.
- Details of a post-trade analysis. Was it successful? What did you learn? Here you will analyse the trade to understand how you can improve a losing trade or acknowledge a successful trade.
These details that you include in your forex trading plan will build a bridge between why you wanted to enter the trade to how the trade played out over time.
It will help paint a picture for you to recognise patterns in your mistakes so you can help avoid them.
It will also help generate a pattern to recognise what you know is working for you too.
Although basic, you have complete power to add what you want to help your trading journey.
How To Quickly Build A Trading Journal
You can write a journal on paper, in a notebook or preferably a trading journal excel or google sheets.
Below simply create a quick trading journal excel (or Google Sheets) with the following headings:
Date – Enter today’s date.
Asset – Enter the asset you are going to trade (EURJPY/EURUSD/Gold/Bitcoin etc.)
Long/Short – Are you going long or short
Timeframe – What timeframe are you trading within. 5 minute, 1 hour, 1 day etc.
Trend – What is the current trend in the timeframe selected?
Entry Level – What is your entry level?
Stop Loss Level – What is your stop loss level?
Take Profit Level – What is your take profit level?
Strategy Used* – If using a strategy, put the name here (if you have one).
Indicators Used* – If using an indicator(s), name them here.
Chart Pattern* – If you see a chart pattern, name it here.
Entry Trigger – Name the conditions that must be met before you entered the trade.
Confidence Rating – Rate your confidence entering the trade out of 10.
Reason – Provide a reason why you entered the trade
Exit Price – Once out of the trade, provide the price you closed out on.
PnL in Cash – Write down how much money you made or lost.
W* – If you won the trade, type a 1.
L* – If you lost the trade, type a 1.
Reason of Exit – Give a reason why you exited the trade. Could be got stopped out, RSI hit the 50 levels, hit a strong support level, etc.
Trading Reflection – Read across the spreadsheet again and reflect on your trade. Be honest with this. Pause and think about what went right and what went wrong. What could you do better?
*You only need to enter one of these per time.
Ok now you know the headings, it’s time to see what a trading journal looks like and how you can use it to improve.
(Click the image to enlarge in a new tab)
Although basic, this will go through every aspect you will need to iron out bad habits and elevate your best ideas.
In the example given, we’ve included an automatic performance table too so you can track how well you are doing overall.
Here’s a pro tip:
With the filter active, select the L column and make it so it only shows rows with the number 1 in it.
What this filters out for you is ALL of your losing trades.
What this does is allows you to review these losing trades over time and reflect on your mistakes and notice any patterns much easier.
You can do the exact same with the W column, being able to review winners is JUST as important.
This is why we use an electronic trading journal.
Download A Trading Journal Excel or Sheets (It’s Free)
How about we make it even easier for you to get started?
We’re giving you the exact spreadsheet used in the above example for you to download right now.
Simply click the link below and click File -> Make a Copy… then save it to your Google Drive.
Alternatively, if you want it to be an Excel spreadsheet go to File -> Download -> Excel Spreadsheet
Once downloaded, open up and you’ll have a brand new forex trading journal
Will A Trading Journal Improve Your Success?
It’s all up to you now.
Trading journals are a great way to track your trading progress, learn from mistakes, and improve over time.
Trading is an art form that takes dedication and practice to perfect – but trading journaling can help you get there faster!
Using the information we have shared with you, you now have everything you need to build a trading journal and start seeing improvement right away!
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