In this lesson
- find out what to record for every trade
- learn to review the journal regularly
- see which questions the journal will answer
Memory is a bad accountant. We remember profits as our own merit and losses as bad luck – and a month later we do not remember either of them precisely. A trading journal is the only way to find out what really works in your trading and what does not.
What to record#
Before the trade:
- date, market and timeframe,
- why you are making the trade – which situation from the plan you see,
- entry, stop-loss, target and position size,
- planned risk (1R in money),
- a screenshot of the chart.
After the trade:
- exit and result in R and in money,
- fees,
- whether you followed the plan (yes / no, and where not),
- how you felt – nervous, confident, bored, angry.
What a journal can look like#
| Date | Market | Situation | Entry | Stop | Result | Plan followed? | Feeling |
|---|---|---|---|---|---|---|---|
| 3 Mar | BTC | zone retest | 62,000 | 60,500 | +2R | yes | calm |
| 6 Mar | BTC | "looked good" | 67,800 | – | −1.8R | no – no stop | FOMO |
| 12 Mar | ETH | zone retest | 3,900 | 3,780 | −1R | yes | nervous |
A spreadsheet or a notebook is enough. What matters is recording every trade, including the embarrassing ones.
The weekly review#
Once a week go through the journal and answer a few questions:
- How many R did I make or lose this week?
- How many trades followed the plan and how many did not? How did the ones outside the plan end?
- Which situation works for me and which does not?
- Does a mistake repeat – such as trades after a loss or late at night?
After a few months you will see patterns that would otherwise escape you. You often find that the trades that follow the plan are fine and it is mostly the ones you made "just because" that cost you money.
The journal helps with taxes too
From the first course you know you should record every purchase and sale for tax purposes anyway. A trading journal gives you that data for free on top.
Common myths#
- "I only record the interesting trades." Then the journal lies. Record every one.
- "The exchange statement is enough." A statement will not tell you why you made the trade and whether it followed the plan.
- "I have no time for a review." Ten minutes a week is cheaper than repeating the same mistakes.
Summary
- Memory distorts – a journal shows what really happened.
- Record the reason for the trade, entry, stop, result in R, whether you followed the plan and how you felt.
- Review the journal once a week: the result in R, trades outside the plan, repeated mistakes.
- It is often not the plan that costs money, but the trades outside it.