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Trading Foundations · Lesson 06 of 06

Keeping a Trading Journal

A trading journal records your decisions, actions, and results. It helps you identify patterns in your behaviour and assess whether you followed your rules.

In this lesson
Learning journal
Course outline · Lesson 06 of 06
  1. 01Understanding Trading and Risk
  2. 02Reading Charts and Timeframes
  3. 03Identifying Market Structure
  4. 04Building a Trading Plan
  5. 05Position Sizing and Managing Exposure
  6. 06Keeping a Trading Journal
Observe

For each demo or historical practice trade, record:

  1. Date, instrument, and timeframe.
  2. Information available when you made the decision.
  3. Setup and entry conditions.
  4. Invalidation and planned exits.
  5. Planned position size and exposure.
  6. Estimated costs and actual execution.
  7. Outcome.
  8. Whether you followed your rules.
  9. What you learned.

Keep planned values alongside actual results. Do not rewrite your original plan after seeing the outcome.

A winning trade does not automatically mean you made a good decision. A losing trade does not automatically mean your process was poor. Review rule adherence separately from profit or loss.

Small samples can be misleading. A few profitable trades do not prove that a strategy has a reliable advantage.

Historical practice also has limitations. Using information that was unavailable at the decision time creates look-ahead bias. Selecting only favourable examples or ignoring costs can distort results.

Record skipped setups and missing information honestly. When changing your approach, document the change and preserve earlier records.

Practise

Practical exercise

Create five demo or historical practice records using the fields above.

Review them and answer:

  1. Which rules did you follow consistently?
  2. Where did you depart from your plan?
  3. What limitations affect your results?
  4. What single process improvement will you practise next?
Download journal
Review · 5 questions

Knowledge check

Write your answers in your learning journal before checking the answer key.

1. What should your journal contain?

  1. A. Winning trades only.
  2. B. Plans, outcomes, and rule adherence.
  3. C. Account balance only.

2. Does a profitable trade prove that you followed a good process?

  1. A. Always.
  2. B. No.
  3. C. Only with a screenshot.

3. Do a few profitable trades prove a reliable strategy advantage?

  1. A. Yes.
  2. B. No.
  3. C. Only if they are consecutive.

4. What is look-ahead bias?

  1. A. Using future information in a historical decision.
  2. B. Recording trading costs.
  3. C. Writing a plan before entry.

5. How should you handle missing information?

  1. A. Invent it.
  2. B. Hide the record.
  3. C. Label it clearly.
Reveal the answer key
  1. B — Context makes your records useful for review.
  2. B — Process and outcome are different.
  3. B — A small sample provides limited evidence.
  4. A — Future information distorts historical testing.
  5. C — Honest records support meaningful conclusions.