A trading journal is a record of a trader’s buys and sells, including the reasons for making the trade and the outcome. It can be used to track performance and identify patterns or mistakes. A trading journal can take many forms, from a simple spreadsheet to a complex software program. Some examples of information that might be included in a trading journal include:
Trade date: The date on which the trade was made.
Instrument: The stock, currency, commodity, or other financial instrument being traded.
Action: Whether the trader bought or sold the instrument.
Quantity: The number of shares, contracts, or other units of the instrument that were traded.
Price: The price at which the trade was executed.
Reason: The reason or strategy behind the trade.
Outcome: The result of the trade, including any profit or loss.
Overall performance: Summary of the overall performance of the trading strategy, and current or past performance of the trading Journal.
Notes: Additional information or observations related to the trade.
An example of a trading journal entry might be:
Trade Date: 01/01/2021
Instrument: GBP/USD
Action: Sold 1 lot at 1.35
Reason: I expect the USD to strengthen against GBP in short-term, so I opened a short position
Outcome: I closed the position next day at 1.33, making a profit of 20 pips.
This example shows that the trader sold 1 lot of GBP/USD at 1.35 on January 1, 2021. The reason for the trade was that the trader believed that the USD would strengthen against GBP in the short term, so they opened a short position. The trade resulted in a profit of 20 pips as the trader closed the position the next day at 1.33