Course Content
What Is a Trading Journal and How to Use One
Trading journals can be very useful, and they play a central role in the trading plans of most professional traders. Things like planning futures trades, documenting existing positions, and recording any emotions that may pop up are essential factors to be aware of when building a profitable trading strategy. Therefore, knowing how to create and use a trading journal is crucial to any trader's success. Without it, a trader could easily lose track of his winning and losing positions. Or even worse, they could blow up their account.
What Is a Trading Journal and How to Use One
About Lesson

It’s one thing to create a trading journal, but it’s an entirely other thing to know how to implement what you learn from it into your trading system. Using a trade journal effectively can turn an unprofitable trader into a profitable trader.

Before you enter any trade, you need to have a good reason for doing so. This is where your written document comes in handy.

Every day when you look at the market, ideas are going to be popping up in your head, and feelings will be flowing through your body. You need to get these ideas and feelings written down so you can spot anything that could either help or hinder your trading performance. This could include generalĀ market behavior, past trades, present trades, and potential trades.

Your written document is also where you’ll be making the argument over whether a specific trade idea you have is good or not. Your trade ideas should be turned upside down and inside out, so you can spot the strengths and weaknesses of each one.

Once you’ve got your thoughts and emotions written down, it’s time to turn to your spreadsheet.

Your spreadsheet is less of a creative space than your written document and more of a logical space. This is where you’ll be recording all of your trades, so it’s important that you keep it neatly organized and up-to-date.

An important factor in having a successful trading journal is measuring your successes and failures accurately. With your spreadsheet, you should ensure you keep accurate records so you can gauge whether the ideas you’ve developed in your written document are profitable or not.

A good habit to get into is to record your trades the moment after you execute them. That’s when they’ll be fresh in your mind, and you’ll save yourself time in the future.

Another good habit to get into is to review your trading journal spreadsheet every single day. That way, you can get a bird’s-eye-view of your portfolio of trades, which can give you some insights into your level of exposure as well as if there’s room to enter any more trades.