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Trading Journal – All you should know (+7 tools)

  • For you trading to get better, you have to keep track of what you do. That’s what your journal is all about.
  • It lets you keep track of what you learn, what you do, your trades, your emotions and your errors.
  • Keeping track and then reviewing it will help your trading to get better

What is a trading journal? 

A trading journal is one of the most important tools that a forex trader must-have. It is a kind of record that carries all the details about your trading activity. From your trading strategies to your trade entry/exit becomes part of a trading journal. Keeping a journal has numerous advantages. It helps you to see a clear picture of your performance in your trades. With that knowledge, you can easily assess the mistakes you made in the past and also see how to avoid them in the future. 

Some traders think that a journal is just a record of past trade entries and exits. They also argue that our broker does that for us. They totally forget that their trading record on their broker’s platform doesn’t give them some crucial information. Moreover, a trading journal is not all about trading entries and exits as you will find out in this article. 

Why a trading journal is important? 

Not only in trading but all performance and goal-oriented professions and even tasks, keeping a trading journal is handy and crucial. Why is it so important to keep a trading journal? It is important because it lets you measure, track, and focused on improving your performance. Let us try to understand it with a few examples that explain how a journal can serve you. Scientists keep it when they are on the road to a new discovery. Athletes keep track of what makes them fitter, stronger, and faster on the playground. And traders keep it to be more disciplined, organized, consistent, and finally profitable. 

A trading journal helps big because it isn’t just a record of trade entries and exits. Instead, it is one of the best tools that help you in refining your trading methods and mastering psychology. To be more specific, it is a kind of gauge that measures your emotional psychology before, during, and after the trade. In more plain and simple words, it helps to stay in a trade, trade according to plan, and to keep emotions at bay from trading. A trading journal has also various other advantages. 

It keeps historical record of the trader’s decisions

A journal provides a historical record to consult with. From this record, traders can assess how many trades you had and how many of them very profitable. You may also consult which currency pairs were profitable and which incurred losses. That means, now you can brood over reducing the risks placed over less profitable currency pairs. You may also find other ways to reduce losses incurred on those currency pairs. 

It helps eliminate recurring errors 

A trading journal, when kept for a while, helps to notice a pattern of the way you have been trading. These patterns can be beneficial or not. When those patterns are beneficial, you will try to keep up with them. Conversely, you will try to eliminate unfruitful patterns and errors in your trading methodology. 

It helps find out your best trading strategy 

Keeping a trading journal for a while also helps to find out your best trading strategy. When you look back through your journal, you get a clear picture of how reliable your strategies were. You can analyze which strategies were profitable and which weren’t. You can also assess which strategy performed better in certain market trends and conditions. All those bits of information help you to assess whether your strategy is good to continue, needs tweaks, or a replacement. 

Psychological perspective 

A trading journal also psychologically helps traders. It helps you keep your emotions away from trading. Beginners or novices get derailed from their trading strategy because of emotions. They lose confidence and make trades without confirmation from their trading strategy. Here a trading journal comes into the picture. It helps traders to be confident by giving them reasons to stick to a trading strategy. That means you will have statistical evidence to stick to your trading strategy and keep emotions at bay. 

How to build your own trading journal? 

Nowadays, you can find numerous trading journal spreadsheet templates online. However, it isn’t rocket science to build a journal of your own. You can easily build your own journal by yourself. Let us see how you should do it.

Relevant metrics and trading charts are the two main elements for a trading journal. You need to record those before and after the trade. The relevant metrics include:

  • Date when you entered the trade
  • The timeframe of your trade
  • Trading setup that initiates trade entry
  • The market of your trade
  • Size of your trade
  • A long or short trade
  • Opening price
  • Closing price 
  • Stop-loss point
  • Profit or loss in $ from that trade
  • Risk in $ (or your favorite currency)

Trading charts that should become a part of your trading journal are:

  • Charts of higher timeframes show a big picture of your position and also help to identify areas of support and resistance
  • Chart of entry timeframe to state setup and with marks of trade entry and stop-loss. 
  • Chart after exiting the trade to state the result of the trade.

Some useful tools

The following is a list of some useful tools for creating your trading journal. 

Trading journal spreadsheet 

A trading journal spreadsheet is a powerful tool. Multiple brokers, instruments, and analysis are supported by it. 

Tradebench

Tradebench is a free trading journal tool that helps to calculate position size and risk management. It also helps to visualize progress through dashboards and charts.

Trademetria

Trademetria is a trading journal tool that comes with an import function that works with various brokers. It has also all necessary journal functions like a dashboard, filtering, etc. 

Trading Diary Pro

Trading Diary Pro is a remarkable trading journal tool with a bulk import function. It is the best tool for those who want to get rid of manual data entry. 

Edgewonk

Edgewonk is a highly customizable tool that helps you find and analyze trading edge. It also helps in improving your trading performance by using proprietary algorithms. 

Tradesviz

Tradesviz is a trading journal tool that comes with extensive visualization options. It also has several other overwhelming functions such as automatically generating critical insight from trading records. 

Tradesync

Tradesync is tailor-made for stock traders and summarizes trade records with recommendations on improving trading. 

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