How To Create A Killer Trading Journal

Every successful trader knows a trading journal is the secret to trading success.

No, the secret is not reading about a holy grail setup or mimicking a trading guru. And yes, while studying thousands of charts and recognizing patterns is important, the next step in gaining mastery is breaking down your own trades.

For this reason, every successful trader I know regularly spends time doing trade reviews from their own trading journal.

Therefore, a good trading journal is a must and should help you identify the following:

Trading Mistakes

Winston Churchill said, “All men make mistakes but only wise men learn from them.”

A good journal helps you identify your mistakes, and most importantly, correct them.

Your strengths

We tend to gloss over what we do right, and instead spend an inordinate time on our mistakes. However, by neglecting our strengths, we often forget about them. After time, we no longer continue to do what was once a strength.

I spend as much time on my winners as my losers. By doing this, I focus on repeating what lead me to win.

Risk Analysis

I’ve often argued that risk management is the single most important thing you do as a trader. In fact, at some point I’d like to test a strategy that is focused solely on risk analysis that completely ignores setups and stock picking. I bet I could at least break even on risk analysis alone.

Your journal must make it easy to identify your risk control.

Impactful Macro Influences

We do not trade in a vacuum. There are many variables outside of your chosen trading vehicle that impact the success of the trade.

While it’s difficult to include all variables, make sure your journal identifies the key big picture influences that impact your trading strategies.

Key Technical Influences

If you are following me, your are a technical analyst and chart trader. Thus, it would seem obvious to include charts in your journal. You’d be surprised how many trader journals I’ve seen that are a spreadsheet without charts!

Make sure to annotate charts and add them to your journal. You’ll thank yourself during the trade review.