The Definitive Guide To Master Your Trading Journal

This guide aims to help you get the most out of your trading journal.

Whether you use an excel template spreadsheet, offline software or an online trading journal to record your trades you must be looking to follow these habits.

These practices were acquired from other traders that use our software and my experience as a trader for three years.

Follow these easy pointers and it might help you find your trading edge sooner.

They also apply to traders who trade Stocks, Options, Futures, Forex and Crypto Currency.

Journals should follow these rules no matter the type if financial market.

Ok, let’s dive right into it.

Use a Tool You Are Comfortable With

There are a few tools out there to journal your trades. You must choose the tool that you think it will make our trade journaling smooth.
You do not want to focus on customizing the tool, instead, you want the tool to work for you.

For example, trading journal spreadsheets are a great way to get started. However, as you start logging in your trades you will find that you will need to spend more time customizing your spreadsheet.

is that really a time well spent?

I didn’t think so either. That is exactly why I suggest to stay away from a spreadsheet.

Instead, look for an online trading software that you can access from anywhere at anytime.

There are plenty out there that you can choose from including ours.

Journal Your Trades as Soon as You Place Them

One of the main points of keeping a trading journal is to reflect on trades we just placed. The journal should be a way for us to isolate us from all the noise of the market and think back to realize whether we made a good trade.

For us traders to be able to reflect on this, we must journal our executions as soon as the order gets filled. The sooner we log them the more insightful information we can provide to the trading journal, therefore the more we can get out of it.

Don’t give me wrong, I’m lazy too and it is very difficult to find the willpower to journal as you trade in real time. First off you must look at a number of data points such as the instrument price, price actions, news, social media channel and with all those factors place a trade. Then once you are in you need to pay attention to your exit, therefore you must watch the price action with an eagle eye. Yes, it sounds like there is no time in between to journal the trade you just placed.

However, you will find the time you invest in journaling your trades right after you place an execution will give you better results than journaling your trades later.

What I have found on the test I have run on multiple traders including myself is that when I log the trade as they happen I tend to obey more my own rules. When you write down your plan is almost like you are writing a contract with yourself that states your goal and exit strategy giving you more accountability for your actions, and when you have accountability you will naturally strive to follow your own rules.

We are talking about investing only 60 seconds in between executions. All you should be looking to log is your entry price, date, time, one or two sentences describing why you took the trade, setups, your goal and most importantly your stop loss or exit strategy.

You can use many ways to journal your trades but to give you an example this is my journal looks after I enter my first log as I open a trade.

As shown in the video. This only good me 60 seconds.

Truth me, give it a try and journal your trades as you place them, and you will notice how your performance improve over a month.

You could also see how the popular traders like Timothy Sykes also journal their trades in the manner. Even the self they say this little time investment help them be accountable for their actions improving their overall performance.

Avoid Importing and Syncing Your Account With Your Journal

DO NOT make the same mistake I made. There is a huge difference in benefits between recording your trades manually and to sync or import your trades directly from your broker or trading platform. When I first started to my journey as a Trader I was using Profit.ly which provides you an easy way to import your trades directly from your broker, so you won’t have to lift a finger to carry your trades over. However, I found myself never reviewing my trades.

I mean, what was the point of doing so?

Everything was already there. In my mind, I could just revise the performance analytics they give you at the end of the week. BIG mistake. This was not helpful at all, as I was not really “journaling” my trades. I was just looking for the trades I made and some reports that is it.

That is all you will be able to achieve if you attempt to skip the step of you journaling your trades by hand one by one.

If you are a scalper that places many executions throughout the day, I’m talking at least 20+ executions a day, then you have no option but to import your trades as it will take hours to record them one by one. No need to be the guy below typing your trades nonstop.

Well, if that is your case, then you should at least import your trades every day right after the market closes and right away start going through each trade and place your insights into each trade.

Review Each Trade at the End of the Day

Journaling your trades do not end when you record your trades. It starts when you first log them in. A trade journal is meant for you to go back and review what you have recorded so you can take the overall data and reflect on it.

This self-reflection should give you insights that you can use to improve your next trading day.

You should be reviewing at the end of your trading day each one of your trade.

At the very least you should evaluate the following:

  • Entry Points: The first execution you took to open your position and each of the executions you took to add to your position.
  • Exit Points: The executions you placed to close or reduce your position.
  • Reasoning: The reason why you enter the trade, the reason why you change the size of your positions and the reason why you closed your position.
  • Intraday Chart: The intraday chart of the price actions, especially if you are a technical analysis trader like me.
  • Mistakes: The mistakes you made and the reason why.
  • Setups: The setup you used to enter the trade.

It is simple, all you need to do is go back and scan through each of your trades to find hidden gems in your data such as:

  • Did I follow my rules?
  • Why did I make mistakes?
  • Was it a good entry point?
  • Could I have to hold my position longer or shorter?
  • Is this setup really working for me?

Record the Reasoning Behind Each Execution

If you are like me sometimes your emotions can take over your decision-making process while trading. You end up making trades that are based on emotions and not on your actual rules, and we know this normally end its losses.

Do not worry, I was there too and most of trader out there are in the same boat.

We all want to make money and we want to make it quick, therefore we skip basics yet simple steps that are critical for an optimal performance while trading the market.

There is not set in stone solution, but journaling trades and the reason why you took each one of them should be a good start to help you control the anxiety that drives those emotions to interfere with your decisions.

By writing down the justification of the trade it will help you to eventually be able to only take those trades that truly follow your rules as you will make yourself accountable. The idea is to put you in a spot that almost serves as a lie detector. Just remember, you must try to be as honest.

Make The Trade Journal Your Own

We are not all equal, some of us are ok interpreting hundreds of numbers in a Journal trading spreadsheet. If you are like me, you probably need more visuals that help you digest the insights behind the numbers.

Therefore, you must adapt your journal to the best way that makes you understand what is really going on when you trade. Make it your own by recording the data points that truly means something to you and that you can interpreter easier.

For example, in my trading journal, I track return % which represent that percentage I made out of the trade. But most people track return $ which is the amount of dollars they made with that trade.

Well, track what is meaningful to you and focus on those points.

Customize your excel spreadsheet template or your online trading journal to show you graphics of your data and the graphics that you truly care about.

As another sample, I trade between the price range of $1 and $7 and I want to know with a graphic, if I do particularly bad towards the high end of the price range. A graphic will help me understand this in a matter of seconds while trying to interpret number in an excel sheet will most likely take me a lot longer to understand this.

Mine Your Trading Journal

As I mentioned briefly before, to make a trading journal valuable to our self we cannot just input our trades and leave it as is.

We must go back and see the overall performance to mine the data and to learn from that. When mining our data, we should be looking for answer sub but not limited to:

  • Which day of the week is the most profitable?
  • Is there a day where I consistently produce losses?
  • What are the slow months for me?
  • What is the best price range for me?
  • Where does 80% of my profit come from?
  • What should I focus on to maximize profits?
  • Based on my trade history is now a good time to trade?
  • Is there a specific setup that outperforms the rest?
  • What mistakes can I avoid to maximize my profits?
  • Where are most of my losses coming from?
  • Do I keep my performance as trade bigger volumes?
  • Which mistakes are costing me the most and is there something specific that is making me make those mistakes?
  • Which price range do I tend to generate more profits from?
  • Which trades have been the most profitable? If there a relationship between them that potentially I can use to focus on such setup?

Anywho there are plenty of questions we should be looking to answer with our trading journal.

This is why I like to either have my journal in an excel spreadsheet or even better an online trading journal that can answer these questions quickly without any work such as TraderSync.

You answer all these questions on your own with a spreadsheet, it just comes down to how much time are you willing to spend tweaking an excel spreadsheet to provide you this information or to use a software like ours that can answer these questions with a few clicks.

You won’t believe how helpful mining your data could be. When I first started trading with Timothy Sykes I was just journaling my trades on a notebook, but it was impossible to get information out of it. I then moved to start recording my trades in an excel spreadsheet and tweak it so it can have graph and easy ways for me to find these answers. However, I found myself investing a lot of time tweaking the spreadsheet. It was just driving my attention away from trading. Then I decided to create TraderSync so moving forward I can focus on trading and let TraderSync to the heavy lifting.

Once it was built I was amazed by the valuable information I was getting out of it. For example, I did not know before cool stats that can help me shape my performance such as

“trading at noon was accounting for 40% of my losses” – I took that information to simply stop trading at noon making me 40% closer to be a profitable trader.

We traders are busy and have plenty to worry about while trading. Therefore, I recommend whichever solution you go for to mine your data, ensure that you are not investing more efforts in the software rather than trading.

Be Honest With Yourself

It sounds easy, yes, of course, we can we honest with ourselves and make notes in our journal of what truly happened when we took the trade.

Well, from my experience it is not that easy. I found myself covering the truth of my wrongdoing when making notes.

It is crazy but what helped me to avoid the lies was saying aloud what truly happened.

Why did I enter the trade? and the reasons behind each of my decision.

By saying it aloud is almost like I did not have a chance to think how to cover any bad decisions. Then I will type that in the notes.

That was just my experience and a potential solution that you can use, but we are not, all the same, it is just a matter for you to find a way, to be honest with yourself and your journal.

At the end, it is for your own good.

Share Your Trades

If you are like me, you probably have impulsive decisions where you enter a trade that did you fit into your strategy but perhaps you were afraid of missing out, so you jump on a trade quickly.

Well, I was doing this very often, I’m talking at least three times a week.

So, I decided to share my trades and thoughts prior and after I take a trade with Twitter. This way, I could use the crowds to make me hold myself accountable for those decisions I took without a real strategy behind it.

I would either take a screenshot of my notes or use a software to easily share them quickly.

I ensure to share the following when potentially acting on a trade:

  • Preying on a potential trade
  • Taking a position
  • Changing my position size
  • Closing my position

After doing this for just about a week, immediately I started seeing an improvement in my performance as I was avoiding those trades that did not fall into any of my strategies. This, as I did not want to share with Twitter a losing trade, so I was carefully picking those that I felt more comfortable with.

Jing is my favorite free software to take a screenshot of my trades.  Even better it would be if you could get to share your trades directly from your journaling so you don’t have to take any screenshots.

Bottom Line

Look,

These are common sense practice if you think about it.

However, most people disregard these techniques and therefore end up with a trading journal that it is of no value to them.

Following these simple tips can drastically help you to improve your performance and being a step closer to be a profitable trader. Take it from myself, I went from losing money in the stock market to start driving consistent profits after a few months of following these rules closely.

Let me know if you have another tip that should be added to this trading journal guide in the comments below.

One response to “The Definitive Guide To Master Your Trading Journal”

  1. […] Profitly is not a trading journal. Plenty of people confuse the fact that profitly import your trades and believe this counts as […]

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