Journaling

Your trading diary

A trading journal is a notebook or spreadsheet where you write down every trade: what you did, why you did it, and how you felt. It sounds like homework. It's actually the habit that most separates traders who get better from traders who repeat the same mistakes for years.

Think about a video game. When you lose a level, you remember what got you ("the jump on the third platform") and do it better next time. A journal is that memory, written down. You need it written because brains are sneaky: they forget losses fast and remember wins forever.

What to write for every trade

• Date and time
• Market and timeframe
• Setup (which rule in your plan)
• Entry, stop and target prices
• Size and dollars at risk
• Result in dollars, and in R (how many times your risk you made or lost)
• Did I follow my plan? Yes or no
• How I felt before, during and after
• One lesson
• A screenshot of the chart

Don't skip the screenshot. In a month you won't remember what the chart looked like.

A sample entry

Here's a made-up entry from a practice account:

• Date: Tuesday, 10:12 a.m.
• Market: MES, 5-minute chart
• Setup: Pullback to the moving average in an uptrend (plan line 5)
• Entry: 6,402.00. Stop: 6,396.00 (6 points). Target: 6,414.00 (12 points)
• Size: 1 contract. Risk: 6 points x $5 = $30
• Result: Hit target. 12 points x $5 = +$60, minus about $2 in fees. That's +2R.
• Followed plan? Mostly. I got in one candle early because I was scared of missing it.
• Feelings: Calm before. Nervous when it dipped 4 points against me. Wanted to close early at +5 points, but didn't.
• Lesson: Getting in early worked this time, but it isn't in my plan. Next time, wait for the candle to close.
• Grade: B. It won, but I broke a small rule.

Look at that grade. The trade made money and still didn't get an A, because a rule got broken. That's the "good trade vs. winning trade" idea from the discipline lesson, written down where you can't forget it.

Reading your journal

The magic happens when you look at 20 or 30 entries at once. Patterns pop out that you'd never notice one trade at a time:

• "Most of my losses happen after 11 a.m."
• "Every trade I took because of FOMO lost money."
• "When I followed my plan, I made money. When I didn't, I gave it back."

Patterns like these tell you exactly what to fix. That's why a good weekly review starts with the journal.

What goes wrong

• Only writing down wins. Losses teach more. Write them down too, especially the embarrassing ones.
• Skipping the feelings part. Your feelings often explain your mistakes better than the chart does.
• Writing it days later. Write it right after the trade, while you still remember what happened.

Remember

• A journal is a written record of every trade: numbers, reasons, feelings and one lesson.
• Grade each trade on whether you followed your plan, not just on profit.
• Read many entries at once to find patterns, then fix one thing.
• Journal every trade, especially the losses.