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Setting up a Trading Journal

By Edited Jun 22, 2014 0 0

Keeping a journal is not required for most jobs but it’s essential for a trader. Do not think that the brokerage report of your trading account will be sufficient. Knowing the final outcome is simply not better than knowing the actual process.

Benefits of Keeping a Journal

  1. It reminds you of your mistakes. This may not seem fun and it’s not fun to record either but you less likely to repeat an error that you have documented.
  2. Truth. Your journal does not lie, well maybe if the author is a liar ;). The numbers and charts tell you exactly what happened and this reveals your effectiveness. This allows you to make the necessary adjustments to your trading over time.

Please remember that the journal will only be as good as you make it, so accurate data will provide you with a journal that you can trust.

Journal Contents

 

1.        Monthly Trading Reports

This is where you document each and every trade.

What to include

  • Time and Date of Trade
  • Trading Instrument (stock name or code etc)
  • What system you trade
  • Short or Long?
  • Entry and Exit Prices
  • Stop Loss setting
  • Profit or Loss
  • Trading Fees or commissions
  • Notes

2.       Monthly Trading Statistics

This is where you document your overall monthly statistical results and can compare them with previous data or even back testing data.

What to include

  • Average Winner
  • Average Loser
  • Total Trades
  • % Win Rate
  • Trading Fees
  • Profit or Loss
  • Expectancy Ratio
  • Max Drawdown
  • Charts of the data if desired

You may also want to do this on a weekly basis as well.

 

3.      Personal Notes

This is where you journal all your feelings and emotions, this was difficult for me at the start. I urge you to journal anything you deem important or that simply bothers you. You might just find answers here to trading problems you encounter later in your career.

What to include

  • Date
  • Your thoughts, feelings, ideas and solutions etc

 

4.      Trade Charts

This is where I document my daily charts.

What to include

  • Snapshot of your daily chart complete with your entries and exits
  • Notes on each specific trade

 

5.      Summary

This is a complete summary of your trading statistics

What to include

  • Overall Statistics (same as the monthly)
  • Charts of the data if desired
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