Your view please- Why Keep a Trade Journal?

Hi can you please share you answer as per your Forex experience on Why Keep a Trade Journal?

Who cares about Trade Journal. All I care about being right mostly. Keep trade journal for what? PRO don't keep any journal.

You are gravely mistaken.

I have experience with two private capital firms that both suggested their trainees keep a journal (or at the very least a notebook for reference.)

They also stressed that trading isn't about being right, which is a desire you have to break (the ego behind needing to be right,) but about how much you lose when you're wrong vs how much you gain when you're right.

Why not?

I agree, you are only right/wrong afterwards which is irrelevant. If you have a journal, you can correct mistakes and see how your trading changes over time.
I bet most save charts with their great victories but not where they have been stopped out. Don't fall into the positive/negative emotional trap with trades but keep on stratigizing (strangulating was suggested by spell check which may also work out!!!)

You'll need to clearly define what you mean by "trade journal". Some traders keep a "journal" of their thought process as they asses markets, and when these trades work out they try to repeat the same thought process to bring about similar results. Likewise if the trade doesn't work out well, they use the same process to avoid making similar mistakes in the future.

This type of journal deal mostly with what's going on inside your head at the moment you make important decisions from entry/exit to rolling stops, scaling in and/or out, etc.

Other traders consider their "journal" as a log of trades they have taken, with dates/times of entries, P/L in pips or cash, time spent in each trade, etc. These traders find more value in their personal statistics and use these to improve trading entry/exit or management techniques.

You weren't specific about what YOU meant when you asked your question. So to answer (somewhat) I would tell you to examine yourself. What type of information do you find most useful? Why is any given trade a winner or a loser? Could any given trade have won or lost more? How? Questions like these are the basis for forming any hypothesis for trading improvement, and therefore dictate what type of information you should be collecting on yourself.

Bottom line, most trades need to gather information about how THEY trade, not how the market moves. Most trading mistakes or errors have nothing to do with the market but will be completely undiscoverable until you begin to collect data on yourself.

Ask yourself some simple questions:

1. Does my trading have an edge?
2. Do I follow that edge?
3. Did my last trade win (or lose) because that's what my edge does?
4. Did my last trade win (or lose) because I went outside my edge?

The answers to these questions have nothing to do with the markets...a trading journal of either type will help you discover what needs improving and how to go about it....THAT's why you keep a trading journal

my journal has highlighted some major issues I have.

my ego hurts a lot during drawdowns and I miss taking trades which incidentally would have been great winners.

If some one is trading for 5 years and expecting to write about every trade or refer to that, so called Trading Journal before pulling the trigger. DEFINITELY NO! Who will decide what is important in that manual and what isn't? Every trader must tune his/her mind to control emotions, this is the hardest part to do. People don't like to change easily. If you are wrong, you are definitely wrong. No discussion needed. If you are right, then market proves you wrong (don't want to go in-depth), that happens (that's where money management saves the a$$). But, that shouldn't happen often. If it happens often, the system you are trading is not well defined or you don't understand the system well enough or you are emotionally disturbed. Nothing else matter!!! Many people talk something but do something else. Welcoming myself to Forex Factory.

A journal is not a checklist. You're talking about something completely different, which is par for the course for many on forums. You saw what you wanted to see in the post, not what was written. People do this all the time in conversations. On occasion I've had to remind people to stop listening to the voices in their heads and listen to the voice speaking to them. You'd do well to heed this advice.

If used correctly:

1- Help improve trading over time
2- Provide a moments break between trade idea, calculation and entry. Acts as a check against compulsive trading.
3- The data will provide you with so many insights into your trading patterns and habits which can be used as intelligence to form your plan.
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I would go on, but if these points are debatable in your head, then it will not matter.

I have done a couple of seminar type things on strategy development and a journal has been a part of every one of them. Whether beginner, intermediate or advanced. A journal always helps.

Keeping record of past trading is very important for a forex trader. Whether we are a beginner or professional trader, analyzing past trades gives us to work out the data of any accurate trading plan. This may be a difficult job because it needs consistency.

When you go to a lecture or class, do you take notes? A journal's very similar.

As with most things in life, you get out what you put in.

I do not keep a journal. It would would be cumbersome and I don't think it would yield much value. The closest I come to it is MyFXBook.

As to the cumbersome part, I place one trade per day on 10 different pairs....sometimes more. That's 50 trades to journal per week. Coordinating the entries takes enough of my time.

Truth be told, the entry points are the only thing that "I" am actually responsible for. I don't manually control exits. I have a trade manager handle that. From the instant the trade goes live the stop loss, take profit, and break even moves are all handled by the computer. I just pull the trigger and the rest is done for me.

So what's to journal? I look for the signal and when it's there I take it. Every time. That being the case, there can be no journal entry that goes, "I saw this great setup today....but I was kinda fearful because I had taken a beating over the course of the week so I let it slide and it ended up bing a big winner! I'll know better next time not to let fear keep me out of a trade."

Since I never pull out of trades manually, there can never be any journal entry that goes, "I knew I should have let the trade ride for another 20 pips, but I was feeling compelled to take the 18 pips profit that was already on the table...next time I'll let the trade run."

Honestly, I think the trade manager is the best thing ever invented where trading is concerned. It takes all of the various things one has to traditionally be "disciplined" about and boils them down to two things.....

#1) Be Disciplined enough to take every signal

#2) Let the trade manager work - don't close trades manually

MyFXBook gives me all the ratios and stuff so I can have a big-picture overview of how things are progressing....but I can't see how a traditional trade journal could help. Maybe EA traders have insight into this. If EA traders found grounds for journaling their robot's trades, I guess the same logic might apply to my approach.

A journal can be what you feel after you have taken a trade/win a trade/lose. I mean you can assess your mental state later on and improve. Maybe once a day. Maybe per trade. Maybe once a week. It depends on what you think you want to improve. Its just a way to remember your mistakes and not doing it again later. Successful traders learn from mistakes.

Some traders still do this for every trade, 5, 10+ years into their careers. They tend to be the types that trade very infrequently (like position traders who take positions for weeks or months on end) more so than intra-day traders, but it's still common with the "pros" as you put it.

That being said, keeping a journal doesn't mean having to write about each trade before it happens. A scalper who takes 10-20 trades a day wouldn't write each one down like this, but they can keep a daily log of their trade day as a whole, and keep note of everything from the emotions they were feeling, to news events that came up which made trading harder or easier, to even a place to write down thoughts and ideas for new strategies.


And that's exactly what a journal is there to help with. It's for keeping your thoughts and emotional states logged as you progress so you can review and reflect. It's a tool, and a very effective one at that, which is why it's commonly encouraged by firms to keep (especially for new trainees.)

Do institutions make it a requirement for all traders or vetted traders? No... at least not where I've been and not that I've heard.

But of the experience I've had so far in the industry, the trainees and new traders are sure pressured to start one and keep it up.

Basically, the industry lets you do nearly whatever you want once you've proved consistent and worth the risk. Til then you'll be expected to do exactly as your manager says and that often involves following the steps they've seen yield the best results. Journaling is often part of that. (Again, I may not be able to speak for all institutions, but in my experience this is the case.)

This isn't about just right or wrong though. You made a statement that the "pros" don't journal. You said it as an 'absolute statement' even. I only assumed by "pros" that you meant institutional traders, or full time independent traders, and I wanted to correct this since I have first hand experience in knowing that the "pros" do, in fact, journal... and more often than not, they journal a heck of a lot more than newb retail traders.

I never mind people expressing their opinion, but when something is presented as fact when it's the far from the actual truth then I usually say something. Not just for the poster, but for others reading it who might be mislead.

That's not putting you down or anything, I'm just trying to shed a little light on the subject. Plus, now you know that journaling is used more often than you realized.

Welcome to ForexFactory in any case

You need a journal so that you know what went right and what went wrong.

If you made money, you want to know why you made money. Similarly, you want to know why you are wrong if you lost money.

Keeping a journal will allow you to spot a pattern in your trading habits.

Without a journal, you will always be chasing a ghost. never knowing what works and what doesn't.

Eventually when you are consistent you will have less and less journal entries. But having a journal is always important.

it forces you to think and evolve

my trading took a 180 since starting a journal

My journal has very few entries in it. Basically it reminds me of certain things like what to expect on the 1st and last trading day and how my system reacts to high impact days like NFP. As far as writing down each - or any trades for that mater - I don't do this. If you have to go look in a journal to read to yourself (don't hold loser trades) then I don't think your ready for this yet.

TJ

I spend a lot of time on my journal. What do I get out of this? I know exactly why I took a trade. I know what the market conditions where, what my analysis was, what my emotions were like, and how the trade turned out. This could be a trade from yesterday, or it could be a trade from months ago.

This level of clarity allows me to fine tune my trades, detecting efficient and inefficienct trading from mental to physical dilemmas. Knowing exactly when to to this and that so that I can maximize every win while minimizing every loss.

If you don't have a journal, you only know "this works. this doesn't work" and thats it. You will never know the WHY something is, because you don't know what was going on in your trades a month ago outside of you winning or losing money.

What software did you use to start? I can't find anything great out there. I've found plenty of Excel templates, but they are really expensive and I can't see how effective they are before I pay for them...