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What to Include in Your Journal Trading Spreadsheet
Published: 01/08/2019

How to Create and What to Include in a Trading Journal

Did you know that there is a simple and effective method that can help you spot any weaknesses of your trading strategy, fine-tune your entry and exit points and improve your trading performance?

Yes, we’re talking about keeping a trading journal.

Almost all successful traders have one and make regular retrospectives of their journal entries to spot and eliminate any recurring patterns that lead to losing trades. In the following lines, we’ll cover what trading journals are, why you should keep one and what fields you need to include. We’ve also prepared a trading journal spreadsheet for you to download, for free!

 

What is a Trading Journal?

A trading journal is a record arranged by date that includes all trades that you take in the market. Trading journals consist of journal entries, each of which represents a separate trade taken by a trader.

It provides an overview of all your trades and the markets that you’re trading, including their entry and exit prices, trade direction, position sizes, trade results, as well as any other information that a trader may find useful to include. Besides your trading strategy and risk and trade management, a trading journal should also be a part of a well-designed trading plan.

 

Why Should You Keep a Trading Journal?

Trading journals provide valuable insight into a trader’s trading performance. By keeping a detailed journal, traders are able analyse their trade results and identify reasons why certain trades worked well, while others didn’t. Is there a specific chart pattern that has an unusually high losing rate? Or is there a currency pair that hits your stop-loss levels only to reverse shortly after?

Trading journals can help you spot those trading mistakes and support you in fine-tuning your trading strategy. In addition, by making regular journal retrospectives, you’ll be able to identify any behavioural patterns in your trading that led to a losing trade. Most successful traders regularly keep a trading journal, and many of them will tell that their trading journal has been an important tool in improving their trading performance.

 

What to Include in a Trading Journal?

Trading journals should include all necessary elements that describe a trade, such as the date and time of the trade, the traded instrument, the direction of the trade, entry and exit prices, position sizes and the result of the trade once it’s closed. Besides these main elements, a well-designed trading journal should include additional information as well.

Those additional entries will help you keep track of your trading improvements and make it easier to analyse your performance.

We’ve listed the main and additional elements below.

The Main Elements of Trading Journals

  1. Date and Time – Each journal entry should include the date and time when a trade has been taken. If you’re using a trading journal spreadsheet made in Excel (you can download our free trading journal template spreadsheet here), you can use the date and time column to filter and arrange your entries and find the one you need
  2. Traded instrument – This element describes the financial instrument that has been traded. Besides the traded instrument, you can also include the market (e.g. Forex – EUR/USD, Commodities – Gold, Stock Indices – S&P 500…) to make it easier to filter the market you need
  3. Trade direction – The trade direction entry can be either buy (long) or sell (short). Our trading journal template will add this field automatically after you enter your entry and exit prices
  4. Entry and exit prices – These are three separate fields, reserved for the entry price, stop-loss level and take-profit level
  5. Position size – In order to determine whether your position sizes meet the requirements of your risk management rules, you need to enter the position size for each trade you take. This field will help you later during journal retrospectives to analyse whether you take too much risk on your losing trades
  6. The result of the trade – The final mandatory field of a trading journal is the result of the trade. Simply add the profit or loss in USD terms (or another currency in which your trading account is denominated)

 

Additional Elements of Trading Journals

Besides the major fields described above, a well-designed trading journal should include additional elements as well. We’ve listed some additional elements below, but you can add any other field that you consider important in evaluating your trading performance.

  1. Market commentary – You can dedicate a separate column to market commentaries. Here you can provide some fundamental background of the traded instrument. For example, is a central bank expected to hike rates at the following meeting, or did inflation rates and economic growth disappoint?
  2. Reasons for taking a trade – In this field, you can describe the reasons why you’ve taken a trade, including fundamentals and technicals. For instance, if you’ve taken a trade because it reached a confluence support of a channel and trendline, and candlestick patterns show that the technical level holds, you can write this information in a bullet-point format into the field.
  3. Charts – Pictures tell a thousand words. Adding a price-chart to your trading journal for each trade will make your life easier once you start to analyse your journal entries in order to improve your trading strategy.

Read:

 

How to Make a Trading Journal in Excel?

Making a trading journal in Excel is quite simple. All you have to do is to include all the fields mentioned above as well as any other fields that you may find useful in your journal. For example, you can create a sheet with the following columns:

Date

Market

Instrument

Direction

Entry Price

Stop-Loss

Take Profit

Position Size

Result

Commentary/Reasons

Chart

The first nine fields should be included in all trading journals and journal entries, while the “Commentary/Reasons” and “Chart” fields are optional fields that will help you in keeping a record of your analysis.

The real value of any trading journal is that it can be used as a tool of education by making regular retrospectives of your journal entries. You’ll find important patterns of which trading method works and which doesn’t work.

Hint: We’ve prepared a trading journal template that includes all the necessary (and additional) elements outlined above. You can download it for free by clicking here.

 

Trading Journal Examples

Here’s a typical journal entry example. We’ve entered with a buy position in EUR/USD, with an entry price of 1.16, stop-loss of 1.15 and take-profit 1.17. Our position size is €50,000, or 0.5 of a standard lot. The reason for entering into the trade was the break of a horizontal resistance around the 1.16 area, followed by a pullback to the broken resistance which now acted as a support for the price. These fields are shown below.

The chart of the trade is also included:

 

Date

Market

Instrument

Direction

Entry Price

Stop-Loss

Take Profit

Position Size

Result

Commentary/Reasons

Chart

1

12-Dec

FOREX

EUR/USD

BUY

1.16

1.15

1.17

0.5

 

Horizontal resistance break and pullback

 

Horizontal Support and Resistance

How to Keep a Trade Journal?

When keeping a trading journal, the key is to stay consistent.

You need to form the habit to enter a journal entry as soon as you take a trade. While having a trading journal in Excel will help you a lot, some traders keep their journals in an old-school notebook.

Whether you keep your trading journal on a computer or in paper-format, the real value of it comes from making regular retrospectives of your journal entries. Try to identify recurring patterns of losing trades, read through the commentaries and other fields to find clues on how to avoid the same mistakes in the future.

Was your stop-loss too tight? Or did you take a counter-trend trade? Try to improve your trading strategy accordingly.

Read: How Make a Living Trading Forex

 

Final Words

A trading journal is a record of all the trades that you take in the market. It provides valuable insights into your trading strategy and performance, especially if you make regular reviews of your journal entries to find recurring patterns that lead to losing trades. All trading journals need to include certain fields, such as the date of the trade, traded instrument and entry and exit prices, to name a few.

However, many traders also include additional fields that will help them evaluate their trading system, including market commentaries, charts and the reasons for taking a trade. If you’re looking to improve your trading performance, keeping a trading journal is a great way to start.

 

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