Importance of Trading Journal and downalod sample spreadsheet

 What is a trading journal?

A trading journal consists of a document where everything you do as a trader is recorded, including strategy development, risk management, psychology, and more. Keeping a trading journal is easy but very effective if created and used correctly. While it can bring valuable insights that may prevent your account from blowing up.

There are several important reasons why keeping a trading journal is important, including:

• It keeps you accountable.

• It makes you more disciplined and consistent.

• It helps you spot profitable trading strategies.

• It documents your strengths and weaknesses.

• It makes you more careful when analyzing potential trades.

Successful traders plan all of their trades meticulously and document the successes and failures of their trading performance. By creating a trading journal and using it correctly, you can become a successful trader regardless of how the market moves

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Spreadsheet columns

Here are some details about the column and row headers on the spreadsheet. The orange boxes need your inputs. The gray boxes are calculated for you:

• Trade #: This is simply a counter. Every round trip gets its own line.
• Entry date: The date you opened the position.
• Ticker: This is just a text box. You can use any identifier you want to help you remember what you traded. I use stock tickers.
• Quantity: If you’re buying, use a positive number. If you’re shorting a stock, use a negative.
• Entry : Enter in the total cost or total proceeds from the opening position.
• Exit date: Enter in the date you closed the position.
• Exit : Enter in the total proceeds or total cost when you exit the position.
• Profit/loss: Profit and loss is calculated for you.
• Days: The number of days in the trade is also calculated for you.
• Protective stop: Enter in any stop you put in to protect your position. If you don’t enter in a stop, enter where you plan to exit if the trade isn’t working.
• Target: Enter in your price target when you opened the position.
• Reward to risk: This is the ratio of how much you expect to make vs. how much you are willing to lose.
• Strategy: Add some text that describes why you entered the trade.
• Conviction: Write how confident you were in the trade when you entered it.
• Comment: This could be anything: current market conditions, what you did right, what you could have done better.
• Win/loss: This is just an indicator whether you made a profit or not.
• Lesson learned: What did this trade teach you?