Trading Journal
A trading journal is a record of every trade you take — the setup, the reasons, the result and what you felt — kept so you can learn from patterns in your own behaviour.
Most traders remember their best wins and their worst losses, and very little in between. A trading journal replaces that selective memory with data: what you traded, why, how much you risked, what happened and how you behaved.1 After fifty or a hundred trades, it shows which setups actually make money, which habits cost you, and whether your results come from skill or luck. This entry covers what to record, how to review it, the numbers to calculate, and the tools you can use.
- Reading time
- 6 min
- Also called
- Trade journal, Trade log, Trading diary
- Updated
A trading journal in plain words
A trading journal is a diary for your trades. For each one you write down the plan before you enter, the facts after you exit, and an honest note about how you followed the plan.
The value comes later, when you look across many trades at once. Patterns appear that are invisible trade by trade — for example, that your Friday trades lose money, or that you take profits too early on winners but hold losers too long.2
How to keep a trading journal, step by step
Record the plan before entering
Setup, reason, entry, stop, target and position size. Writing it first stops you inventing reasons afterwards. See Trade Thesis.
Record the facts after exiting
Actual entry and exit prices, fees, profit or loss in money and in R (multiples of the risk). See R-Multiple.
Tag every trade
Label the setup, market condition, mistakes and emotional state, so you can filter later. See Journal Tags and Trade Annotations.
Add a screenshot
A chart at entry and at exit shows what you saw, which memory will not.
Review weekly
Look at results by setup, by tag and by day. Write down one thing to keep doing and one thing to change.
Review the process, not just the outcome
A rule-following loss is a good trade; a rule-breaking win is not. See Good Losses and Bad Wins.
Worked examples
Example 1 — One journal entry
EntryA trader buys 100 shares at $50.00 on a pullback to support, with a stop at $48.00 and a target at $54.00, then exits at $53.10.
| Risk (1R) | 100 × $2.00 = $200 |
| Result | 100 × $3.10 = +$310 → +1.55R |
| Tags | Setup: pullback · Mistake: exited early · Emotion: nervous |
| Lesson | Exited before target with no new information |
A profitable trade can still carry a lesson. Over many trades, the “exited early” tag will show how much it costs.
Example 2 — What 40 trades revealed
ReviewAfter 40 trades, a trader filters by setup. Breakouts: 18 trades, 7 winners averaging +2.2R, 11 losers at −1R. Pullbacks: 22 trades, 12 winners averaging +1.6R, 10 losers at −1R.
| Breakouts: (7 × 2.2 − 11 × 1) ÷ 18 | +0.24R per trade |
| Pullbacks: (12 × 1.6 − 10 × 1) ÷ 22 | +0.42R per trade |
| Decision | Focus on pullbacks; review breakout rules |
Both setups made money, but one made nearly twice as much per trade. Without a journal this would be guesswork. See Expectancy.
Example 3 — The cost of a habit
HabitThe same trader tags 9 trades as “moved stop further away”. Those 9 trades lost an average of −1.8R, against −1R for losses where the stop was respected.
| Extra loss per trade | 0.8R |
| Over 9 trades | −7.2R |
| At $200 per R | −$1,440 |
Putting a money figure on a habit is often what finally changes it.
Try it: what your journal numbers mean
Enter the win rate, average win and average loss from your journal. The calculator shows your expectancy — the average result per trade — and what it means over a month of trading. It runs in your browser.
| Break-even win rate at 1:2 | 33.3% |
| Expectancy per trade | +0.20R (+$20.00) |
| Expected result over 100 trades | +$2,000.00 |
On average this combination makes money — if the win rate and ratio are real, measured over many trades.
Before commissions, spreads and slippage, which lower the real result. Actual sequences of wins and losses vary widely.
Ways to keep a trading journal
| Aspect | Strengths | Weaknesses |
|---|---|---|
| Notebook | Simple, encourages reflection | Hard to filter or calculate statistics |
| Spreadsheet | Free, fully customisable | Manual entry; formulas break; easy to stop updating |
| Broker statements | Accurate fills and fees | No reasons, tags or emotions; no setup analysis |
| Dedicated journal app (for example Trading Metrics, our sister site) | Imports trades, calculates statistics, filters by tag and setup | Supported brokers and exchanges vary; paid tiers on many apps |
What a journal helps you do
Find your edge
See which setups, markets and times of day actually make money. See Trading Edge.
Measure discipline
Track how often you follow your rules, separately from profit. See Rule Adherence and Rule Violations.
Spot emotional patterns
Tags show whether losses cluster after big wins, after losses, or late in the day. See Revenge Trading.
Set realistic expectations
Real win rates and average R tell you what drawdowns to expect. See Drawdown.
Advantages and disadvantages
Advantages
- Turns memory and feelings into measurable data.
- Shows which setups and habits make or cost money.
- Builds accountability, which improves discipline.
Disadvantages
- Takes time, and value only appears after many trades.
- Inconsistent or incomplete entries give misleading results.
- Small samples can suggest patterns that are just luck. See Sample Size and Statistical Significance.
- Manual journals are easy to abandon after a losing streak — when they matter most.
Going deeper
Read as far as you need. Each level builds on the one before it.
Start with ten fields
Beginner
Date, market, direction, setup, entry, stop, target, exit, result in R, and one sentence on what you did well or badly. Add more only once this is a habit.
Choosing a journal tool
Intermediate
A spreadsheet works well while you trade a handful of times a week. As volume grows, re-typing fills and maintaining formulas becomes the reason journals are abandoned. Dedicated journal apps import trades and calculate statistics for you.
Trading Metrics — our sister site, under the same ownership as this dictionary — is one such app. It imports trades from several crypto exchanges (Binance, Kraken, MEXC, Coinbase and Bybit at the time of writing), records notes, tags, screenshots, emotions, fees and risk, and breaks results down by setup and habit; support for stock brokers is planned. Other journal apps exist with different strengths, so compare which brokers each supports, what it costs, and how easily you can export your data before choosing.
MAE, MFE and trade efficiency
Advanced
Recording how far each trade went against you (maximum adverse excursion) and in your favour (maximum favourable excursion) shows whether stops are too tight and exits too early. Comparing realised profit with the best open profit gives trade efficiency. See Maximum Adverse and Favourable Excursion and Trade Efficiency.
Common mistakes
Only journaling losers
Winners teach as much as losers; skipping them skews every statistic.
Writing the reason after the trade
Reasons written afterwards are rationalisations. Record the plan first.
Judging by profit alone
Track rule-following separately, or luck will look like skill.
Never reviewing
A journal that is never read is just a log. Schedule a weekly review. See Trade Review.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- A trading journal records the plan, the facts and your behaviour for every trade.
- Write the plan before entering; record results in R as well as money.
- Tags make it possible to see which setups and habits make or cost money.
- Review weekly and judge process separately from outcome.
- Use whatever tool you will keep using — notebook, spreadsheet or a dedicated app.
Frequently asked questions
What should I write in a trading journal?
Is a spreadsheet good enough?
How many trades do I need before the journal is useful?
Further learning
- Risk-to-Reward Ratio
The numbers your journal will measure.
- Drawdown
What your journal statistics imply about losing streaks.
- Position Sizing
Why every entry starts with defined risk.
- Stop Loss
The rule journals most often show traders breaking.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- CME Group. Step 5. Keep a Trade Log (opens in a new tab) Checked .
- IG. Building consistent trading habits (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Trade Journaling (opens in a new tab)
- Trading Metrics (our sister site): Trading Metrics: trading journal and analytics app (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.