Starting Your Trading Journal: A Step-by-Step Guide to Tracking Trades

A trading journal isn't just for tracking profits and losses, but also the reasoning behind trades. It allows you to learn from your decisions, understand market context, refine your strategy, and monitor your mindset. However, we need to make sure your journal is actually useful for you. It's not just a way of tracking your trading, but also give you data which you can optimise later on.

Starting a Journal

Most traders tend to fall into a bit of a trap, they only track the data given to them from their trading terminal! Things such as profit or loss, the number of pips, and so on. Tracking this data can be useful, but there’s more we need to take into account: 

- What about screenshots so you look back at the context?

- Explanations of why you made certain decisions?

- What about the tools or indicators you used?

I’m going to give you a basic journal to get you on the right track, then you can add things which are relevant to your own trading as you go. We’ll focus on a qualitative journal, which is about recording the context. There's also a quantitative journal which is the spreadsheet side of things, but we'll cover that separately.

Setting Up Your Journal

The first thing you’ll need is a way to store your data. There are many different note taking apps available, we like Notion but it can be a bit complicated if you’re just getting started. Alternatively we’ve recommended Evernote in the past which is a bit easier to use.

Once you’ve got that sorted, you're ready to create your first journal entry. It’s a good idea to create a template to duplicate when you add more trades in the future. 

It may seem silly, but the title of the note is important. It’s going to help you match up your journal entry to your spreadsheet data. I would recommend using the date of trade entry, followed by the asset.

Market Selection and Entry

Next up is the explanation of the market selection and the entry. Here you’re going to want to use screenshots of anything relevant to your entry. That means screenshots of different time frames, and adding some short annotations if needed.

It’s likely the screenshots are going to show you most of what you need, you don’t need to write walls of text about the entry. If you're adding any text, focus on the reasoning for making a decision. The more text you write, the more time it may take to review it in the future, or you’ll probably just end up ignoring it anyway and looking at the screenshots.

We start with the market selection, this shows us why we are choosing to trade that particular market. We have screenshots with annotations that outline the possible outcomes. 

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The second step is the analysis. We’re also including screenshots of anything that is relevant across different time frames. Again, we include some annotations on the screenshots and short bullet points.

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Thirdly is the entry itself. A screenshot showing the entry, again with a few annotations and short short bullet points. We also include the position size, which is based on the probability of the trade, and the stop loss and target.

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Next up we’ll include any fundamental analysis if there is any. It can also just be used for noting any major economic news which could disrupt the trade.

That covers the market selection up to the entry. But we don’t stop there. Next you’ll need to trade what happens during the trade, the trade management.

Trade Management and Exit

You don’t need to track every single movement, but focus on the important areas. Where will you be making decisions? To help with this, we explain our trade plan:

- What are we doing when the trade reaches the target?

- Adjusting the stoploss?

- Looking to scale out or exit?

- Why are we deciding those actions?

Then we’re recording the actions we did take and why we took those actions.

And that leads us to the trade exit.

- Why are we exiting the trade?

- What was the final result?

Mindset and Conclusion

After that we look back at our mindset and personal factors. Could there have been things that improved or hindered our performance?

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And finally a conclusion. This is where you review the trade and decide if all the decisions you made were in line with your system or your approach. Sometimes it’s good to reflect back later in the day, or in a few days.

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Now you have simple journal setup with a few key areas:

- The market selection and entry

- The trade management

- The exit

- And mindset factors followed by a conclusion

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