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Old 04-01-2008, 08:29 AM   #1 (permalink)
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The 10 Components of a Successful Trading Journal



In our last lesson we finished up our discussion the different styles of trading with a look at the longer term style of position trading. In today’s lesson we are going to start a new discussion on one of the trader’s most powerful tools, the trading journal.

As I think most people who are successful at anything will tell you, a major factor that separates the successful from the unsuccessful is those who are successful look at each experience as a chance to learn and grow where those who are not move from one experience to another without learning much at all. With this in mind one of the major things that separates the profitable trader from the unprofitable trader is an openness to learning from each trade, and a willingness to put in the effort it takes to document and periodically review each trade that is made.

Traders who document their trades do so in trading journals. This can be as simple as writing down certain details of your trades in a notebook or in a word document, however those who know a bit about excel normally find this a much more powerful option

Below are 10 things that in my opinion it is important to document about each trade. :

1. The general market conditions for that specific trading day. For example is there a lot of volatility in the market, is the market trading lower or higher, ranging or trending?
2. Why you entered the trade, the time you entered the trade, and the price you entered the trade.
3. Why you exited the trade, the time you exited the trade, and the price you excited the trade.
4. Whether the trade was a long or short trade.
5. What happened with the market from the time you opened the trade to the time that you closed the trade.
6. The money management parameters you used in the trade and which we covered in our previous lessons on the subject.
7. Many traders will also attach a chart with their analysis on it to help them remember the trade when they review their trading journal.
8. Where you were weak that particular day and what you are going to do to address those weaknesses.
9. Where you were strong that day and what you are going to do to address those strengths.
10. Any other thoughts that you had that day which should be noted.

That’s our lesson for today. In tomorrow’s lesson we will look at the next and equally important step of how to go about reviewing your trading journal periodically in order to make sure that you leverage your journal to improve your trading.

As always if you have any questions or comments please leave them in the comments section below, and good luck with your trading!

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Old 04-06-2008, 12:17 AM   #2 (permalink)
 
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Electronic journal example?


Anyone have an electronic journal example they'd like to share? If in excel just the blank spreadsheet would be great. I currently use a paper journal but it does make sense to transition over to excel - especially using Dave's model.

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Old 04-06-2008, 10:28 AM   #3 (permalink)
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Quote:
Originally Posted by rocketman7 View Post
Anyone have an electronic journal example they'd like to share? If in excel just the blank spreadsheet would be great. I currently use a paper journal but it does make sense to transition over to excel - especially using Dave's model.

Rocketman7
Hi Rocketman7,

Here is one from Trader Mike of Trader Mike:

My Trading Journal (Excel Spreadsheet) : Trader Mike

Best Regards,
Dave
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Old 04-06-2008, 11:58 AM   #4 (permalink)
 
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Quote:
Originally Posted by David Waring View Post
Hi Rocketman7,

Here is one from Trader Mike of Trader Mike:

My Trading Journal (Excel Spreadsheet) : Trader Mike

Best Regards,
Dave
Thanks Dave,
I'll take a look at it and see if/how we can make it better.

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Old 11-28-2008, 07:51 PM   #5 (permalink)
 
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Trading Journal Template


Here is my Daily Trading Journal Template (geared toward directional trading with swing time horizon).
Any enhancements/comments/suggestions are welcome.
Borges.

Daily Trading Journal Template
(implemented as a combination of a journal and a spreadsheet to assist statistical calculations)

I. Overview (mainly done before the trading day)

1. Market conditions
a. General market overview
b. Events/news releases
c. General state of the instruments I intend to trade

2. Plan for the day
a. General
b. Possible setups to watch

II. Trades (all open, opened/closed today trades – not all points apply to each)

1. Entry
a. Reason (including stop/target reasons)
b. Time
c. Price
d. Long/short
e. Position size
f. Stop
g. Target

2. Exit
a. Reason
b. Time
c. Price

3. Money/risk management
a. Initial risk/reward in points
b. Risk/reward ratio
c. Risk % of account
d. Resulting total % account risk (all open trades)

4. Chart

5. Strategy utilized

6. Condition during the trade
a. General status
b. Is initial setup still valid?
c. Position management (if any)
d. Floating P&L

7. P&L
a. Net on the trade
b. % of account
c. Total per month (net and %)

8. Holding time

9. Accuracy statistics

III. Review

1. Day’s weaknesses
a. General
b. Errors 1,2 and 3
c. Why?
d. Solution

2. Day’s strength
a. General
b. How to leverage strength?

3. Other thoughts


(I addition, there are Monthly, Quarterly, Yearly review, which among other things includes statistics such as: P&L, accuracy, actual risk/reward ratio etc.)
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Old 11-30-2008, 06:23 PM   #6 (permalink)
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Hey Borges,

This is a very thorough journal thanks a lot for sharing it. Everything that I can think of that should be included in a trading journal is there and there are even a couple of ideas that this has given me for my own notes.

Best Regards,
Dave
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Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.
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Old 12-15-2008, 10:28 PM   #7 (permalink)
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Hi Dave

Where can I get a free trading journal?

Perhaps a word document described thoroughly for each trade for about a year (with pictures).



Because I think it's faster to learn from someone's past experience.
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Old 12-16-2008, 10:07 AM   #8 (permalink)
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Hi DMA,

Glad to hear from you.

We have just launched a new section here on InformedTrades where I am encouraging people to post trading journals. There are already several in there but not with the type of history that you are looking for since it is relatively new, but we hope to build it up so feel free to keep a journal there if you would like, the link is below:

Member Trading Journals - InformedTrades

For Journals with some longer history than what we have here so far check out the link below:

Trading Journals @ Forex Factory

Best Regards,
Dave
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Old 07-23-2009, 08:59 AM   #9 (permalink)
 
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@Borges:
Commisions are missing in your journal template. Also, do you have a spreadsheet file that you could share with us?

Thanks in advance.
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