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Section 3: Trading Journal

Having a journal is one of the most effective trading tools a trader can have

Journals help us in several ways: 
  • Help us understand the market in retrospective.
  • Help us to have a better understanding of our weaknesses and strengths.
  • Help us judge our performance.
  • Help us with our discipline.
Understand the market in retrospective 

Both losing and winning trades teach us important lessons, but losing trades often provide us with the greatest opportunities for personal growth. By having a journal we are able to go back to our losing trades and review them to see if there is something we can do to improve our trading system. 

Weaknesses and strengths 

By looking at historical trades we are able to see ignored behavioral patterns about ourselves. For instance, we used to trade all the European session all the way to 2:00 EST. By reviewing our trades we noticed that most of our losses occurred after 11:00 EST so we cut back dramatically during that period. With a trading journal we are able to track patterns like this one. Some traders I have taught find that trades taken on the 5 min charts are more prone to failure due to the inherent “noise”, so remove them from their system – this can be tracked and identified with a trading journal.

Performance 

Of course, we are able to see which signals worked best and under what market conditions they were triggered. 

Discipline 

By reviewing our journal we face every mistake made. 

A trading journal should include: 
  1. Currency pair bought or sold
  2. Exact date (including time)
  3. Entry, stop loss level and take profit prices
  4. Why the trade was made (trigger signal and from what system)
  5. Actual Exit, if different from SL and TP levels a reason for it.
  6. Hold times
  7. Trade development and thoughts
  8. What did I do well?
  9. What would I do differently if I repeated this trade?
  10. Position size
A trading journal should look like one of these: 

image

[Image 2]

Those are some the journals we use. You can use one of these or make your own, but it is important that you keep a journal of your trades. I have a number of other versions freely available so please ask if you would like to see them.

Remember that having a journal is not enough, you need to review it. Try to understand what you did wrong and learn from it, commit yourself to not make the same mistake again. Also analyze your winning trades, learn from them and try to see what you did right so you repeat that behavior in the future. 

We hope you have found these lessons helpful and have put you on a path to a long, satisfying and successful trading career. If there is anything else you think we at StraightForex can help you with please ask. Best wishes for your future.

You are probably aware we offer a personal coaching or mentoring facility that we highly recommend to both Novice and Advanced Traders as we believe (and our successful students continually tell us) there is no substitute for live teaching or trading in the company of an experienced tutor. You do not have to take this journey alone.

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