Trading Journal
Image courtesy of Shutterstock

Learn from Your Mistakes: Keeping a Trading Journal

By:Christopher Vecchio - CFA

There are plenty of trading journal software applications available. But it doesn’t need to be that complicated. A composition notebook or spreadsheet might be enough.

  • A trading journal should be more than just a log of transactions.
  • Traders battle the market and their own biases at the same time.
  • Your trading journal should include these nine items.

A trading journal is a way to track your trading performance. By recording your trades, you can review your executions to improve your performance by learning from both your winners and losers.

After all, market conditions are always evolving, so traders need to continuously educate themselves to discover what strategies are working well and when they might have lost an edge.

Yet a trading journal can and should be more than just a log of entries and exits, profits and losses. Traders can write down their thoughts, emotions, and observations during pre-trade and post-trade analysis. As much as traders battle the market, they are also battling their own biases. Keeping a trading journal allows a trader to identify their strengths and weaknesses with relative ease.

What goes into a trading journal?

There are plenty of trading journal software applications available. But it doesn’t need to be that complicated. Go to your local pharmacy and pick up a composition notebook if you like to handwrite, or simply use a spreadsheet on your computer. Either way, you should include these nine items when journaling a trade:

  1. Date and time
  2. Traded product/contract
  3. Position size
  4. Trade direction/strategy
  5. Entry price, date and time
  6. Exit price, date and time
  7. Profit and loss
  8. Market-condition analysis
  9. Psychological state

5 reasons to use a trading journal

Keeping a trade journal takes time, but it’s a worthwhile exercise if you want to become a better trader. You learn about patterns in markets, but you also learn about yourself: the time of day you perform best; the right mindset when finding profitable opportunities; and how to overcome your shortfalls in an objective fashion. Here are five reasons why you should keep a trade journal:

  1. Creating a routine: Initially, adding another task to your trading may seem burdensome. But numbers don’t lie, and having a consistent log will allow you to dispassionately figure out what’s working and what’s not. And having the discipline to record your progress will help you build a concerted process in your trading efforts.
  2. Figuring out strengths and weaknesses: What’s your most successful trading style? Or trading strategies? Or timeframes? Having these data at your disposal will allow you to do less of what’s holding you back and more of what’s propelling you forward. In reviewing my trading journal, I learned that my least successful trades were intraday scalps – so I stopped scalping! In turn, my results improved by eliminating my least successful executions.
  3. Improving risk management: Are you taking profits too early and letting losers run longer than you should? Are you scaling your position sizing incorrectly? Answers to these questions will be easily identifiable from the data gathered in your trading journal.
  4. Market conditions and patterns: History doesn’t repeat, but it often rhymes. Under certain market regimes, certain types of assets move closely together while others trade opposite to one another. Logging these observations will create a reference database for you to review when you run into similar market conditions in the future, then easily identify what strategies were profitable and what mistakes to avoid again.
  5. Conquering the market—and yourself: Trading is not just a battle against markets, but a battle against yourself. Everyone has cognitive and emotional biases that they struggle with over time. Keeping a running tab of your emotional mindset before, during, and after a trade will allow you to identify and correct any mistakes in your approach before they cost you in the future. Trading is a constant learning process, not just about markets but how you deal with mental adversity.

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

 For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.  Options, futures, and futures options are not suitable for all investors.  Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on

tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.

tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.

tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.

© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved.  Applicable portions of the Terms of Use on apply.  Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.