How to Keep a Trading Journal: What to Record and How to Review It

Key takeaways

• A trading journal records each trade with its plan, its execution and its context, so results can be traced back to decisions.
• Write the planned risk and the rule check before or right after each trade, while the details are still fresh.
• Review on a schedule: a short entry after each session and a deeper weekly review by setup, time of day and rule compliance.
• A few simple statistics go a long way: win rate, average win and loss, expectancy per trade, profit factor and maximum drawdown.
• Small samples mislead: wait for enough trades of one setup before drawing conclusions, and compare like with like.

What a trading journal is: the short answer

A trading journal is a record of every trade you take, written so that each result can be traced back to the decision behind it. It stores more than the profit or loss: the setup, the planned risk, the entry and the exit, the market context and whether the rules of your trading plan were followed.

The broker statement tells you what happened to the account; the journal tells you why. Without it, a review relies on memory, and memory keeps the dramatic trades while forgetting the ordinary ones that make up most of the results.

What to record for every trade

Split each entry into three parts: what you planned before the trade, what actually happened, and the context around it. The planned part should be written before entry or immediately after, because once the outcome is known it becomes hard to remember honestly what you expected.

Planned risk deserves particular care. Write it in money and in ticks, using the official tick value of the contract; the position size calculator gives the same figure from your stop distance and account risk, so the number in the journal matches the number you used to size the trade.

• Identification: date, time, contract and direction.
• Plan: setup name, entry price, stop price, target or exit rule, number of contracts and planned risk in money.
• Execution: actual entry and exit prices, slippage in ticks, commissions and fees, and the result in money and in ticks.
• Excursions: how far the trade went against you (maximum adverse excursion, MAE) and in your favour (maximum favourable excursion, MFE) before the exit.
• Rule check: was each rule of the plan followed? If not, which one, and why.
• Context: session, volatility, scheduled news, and a screenshot of the chart at entry and at exit.
• Notes: one or two factual lines on what you saw and how you reacted.

Expressing each result as a multiple of the planned risk, often called R, makes trades comparable across contracts and position sizes. A loss clearly larger than 1R is an immediate sign of a stop that slipped badly or was moved.

Where to keep it: spreadsheet, software or platform

A spreadsheet with one row per trade and one column per field is enough for most traders, and it lets you calculate any statistic you need. Dedicated journaling software can import executions automatically, which saves time and avoids typing errors, but the plan and rule-check fields still have to be filled in by you, since no import knows what you intended.

NinjaTrader 8 also includes a Trade Performance window (Control Center › New › Trade Performance) that generates statistics from your trade history. Its displays include Summary, Analysis, Executions, Trades and Orders, and in the Account Performance window a Journal tab lets you keep notes, including entries attached to a specific execution or trade. Whatever the tool, export or back up the data regularly, so your history does not depend on a single installation.

Choose the format you will actually keep up. A simple journal completed after every session is worth more than a detailed one abandoned after a few weeks, because the value of the record comes from its continuity.

How to review your trading journal

Review at two speeds. After each session, spend a few minutes completing the entries and noting anything unusual. Once a week, step back and look at the trades as a group, because patterns only appear across many trades, never in a single one.

Look at the trades you skipped as well. When a valid setup appeared and you did not take it, note it in the journal; a habit of hesitating on one setup is as useful to know as a run of losses on another.

• Rule compliance: count the trades that broke a rule and compare their results with those that did not.
• Planned vs actual risk: check whether losses stayed close to 1R or regularly went beyond it.
• By setup: compare results setup by setup instead of looking only at the total.
• By time and context: group trades by hour, session or news days to see where the method works and where it struggles.
• Exits: compare the MFE with the actual exit to see how much of the favourable move was captured or given back.

If losses regularly exceed the planned risk, the problem usually lies in execution or sizing rather than in the setup itself; futures trading risk management covers slippage, gaps and correlated positions in detail.

End each review with one decision at most: a rule to clarify, a time window to avoid, a setup to watch more closely. Write it down with the date, then check at the next review whether it helped.

Simple statistics to track

A handful of statistics answer most questions. They are easy to compute in a spreadsheet, and trading platforms calculate several of them too. Compute them net of commissions and fees, which weigh heavily on frequent, small trades.

Win rate and average result have to be read together. A method can win less than half the time and still show a positive expectancy if its average win is clearly larger than its average loss, and a high win rate can hide a negative expectancy when the few losses are large.

Limits: small samples and misleading numbers

Statistics from a few trades are mostly noise. A setup that won its first handful of trades may simply have been lucky, and a short losing streak says little about a method that has worked over many trades. Wait until a setup has a meaningful number of trades before judging it, and remember that past results, however carefully measured, describe the sample you recorded and nothing more.

Compare like with like. Results from simulation and from live trading, or from a quiet month and a volatile one, are not directly comparable, so tag each trade with the account type and the market conditions. When a rule changes, start a new period in the journal so that old and new results are not mixed.

• Tag every trade with its setup, account type and market conditions.
• Start a new period in the journal each time a rule changes.
• Keep losing trades and rule breaks in the record; deleting them makes every statistic look better than reality.

Put it into practice

• Trading journalLog your trades in your browser and import exports from 12 platforms.
• Free backtesterTest a rule-based strategy in your browser, on public data series or your own NinjaTrader exports.

Frequently asked questions

Sources

1. Trade Performance — NinjaTrader Help Guide
2. Performance Displays — NinjaTrader Help Guide
3. Statistics Definitions — NinjaTrader Help Guide

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