Everyone should have a trading journal.
Hey, you, asshole! Yeah, you! Do you have a trading journal?
I don’t care if you’re not trading. You should have a trading journal.
Don’t worry, I’m not expecting you to write the next big Diary of Adrian Mole or anything. Trading journals are literally when did you open your trade, why did you open your trade, what did you do with your trade, and repeat all of those questions for a close.
The benefits are pretty obvious. You’ve got context for each trade. You can see very specifically when you’ve screwed up. You can log the trades you would’ve taken but couldn’t for whatever reason. You can log trades taken in error and see how they perform or didn’t (and this particularly could lead to an entirely different trading strategy you never even saw originally). You can wrap everything up in statistics to give you better guidance.
There’s a lot of things you can do with a trading journal. Even better, they’re very little work to set up and only require a few minutes a day to update (depending entirely on how many trades you’ve taken). Trading journals are quite specific though – there’s no point you using mine if you trade in an entirely different way to me, as I’m going to have a bunch of columns and data to enter different to your strategy.
I’m going to show you mine as a sample and even offer it for download as an Excel spreadsheet but you should still build your own from scratch. In short, do some work, you work… shy… slacker. Bastard.
Let’s start with the basics that every trading journal should have.
Entry # – Pretty obvious really.
Date – Pretty obvious really.
Time – sigh
Instrument – Hooray! Actually something that might not insult your intelligence. This would be the pair you are trading on. e.g. GBPJPY
Direction – Is this trade a long or short?
Entry Price – What price was this trade officially taken at by your broker
Initial Stop Loss – What price did you place your initial stop loss (even if you don’t have a stop loss in your system you should still have this in your journal in case you change your system in the future)
If you had a coin flip system with set pip targets for your take profit and stop loss, you could probably get away with this and be done. It’s really that simple.
When your system is a little more complicated, like mine, you ideally need more detail. So, where do we go from here?
You look at your system, and determine the data you want to record from it.
At present, I trade on the 15m and have the following indicators:
- A trend following indicator on the 15m that provides entry signals
- An MTF version of the above that provides signal confirmations on the 4h and 1d
- An exit indicator on the 15m that determines my initial stop and when I start moving my stops/take profits
- An MTF version of the exit indicator that acts as an MTF confirmation for entries
- A second confirmation indicator on the 15m that provides a secondary confirmation for my entry
- An MTF third confirmation indicator that provides a long term trend confirmation for my entries
The things I know about my trend following indicator is that it repaints. In the moment it’s very strong, but it uses a repainting average so weaker signals can disappear (hence the multiple confirmation indicators to back up the indicator that determines my entries). As such, I have no ability to backtest this indicator outside of the alert entries I get. I can’t get much data off this if I’m not looking at it in the moment, so any historical logging is going to be weak at best.
My other indicators, potentially I can see quite a bit of data, but I also have a system where everything has to match. Therefore, any data I get from any of my indicators can’t really influence what I put on my trading journal at this point.
Okay, so none of that needs to be in my trading journal. What about the system though? How do I trade it?
Well, I know I have a stop loss and I know it moves based on my exit indicator. This can be candle-to-candle as well, so it can move quite a bit. So, I want a Final Stop Loss column, and in that, I can have a Pip Difference column to determine the jump between my Initial and Final stops.
I only have one way of exiting my trades at the moment – when the stop is hit – so I don’t need a column detailing what my exit’s triggered by, but I do need a Time of Exit. I can get an average time of trades using that information.
The next colums are all reasonably self-explanatory and all float around the result. Result, Actual Exit Price, Profit in Pips and Profit/Loss are all about getting the individual elements of your bank management/win and loss status committed to history.
The next bit can get a little bit complicated but it’s so important. Percentages. Maximum 100%. Minimum 0%. Perfect, or rock bottom. There is no extension.
% of bank – how much did you risk?
Running % – The running % increase or decrease of your initial deposit during your entire trading
Average trade % – what’s the average gain over time for your strategy?
It’s always worth noting the Recent News column as well, but also put a couple of columns aside to include Commentary and Chart. In commentary, add everything about how the trade changed and evolved and when. Did you change a stop loss, did you cash out a small amount, did you set a TP, was their an abnormal pip movement or change to one of your indicator’s status readings etc etc. This information will help you develop your strategy further in the future if you can find one or two things that keep happening in ways you aren’t expecting.
For those extra complicated trades, you can also include the screenshot of a chart so that things make sense when you look back on them in visual form.
So, there you go. My trading journal constantly evolves and this is just one part and one form of it – so should yours. Mine is available for download here as an Excel template in really basic form, but do develop your own. It’s important that you’re keeping the right data that’s going to help your own trading.