Day Trading Journal

A day trading journal is the only part of your trading arsenal required to succeed at active trading.  Your journal contains each trading transaction and a brief summary of the trade.  Much like a traditional journal, a day trading journal takes you into a deep intrapersonal conversation that leads to the road of consistent profits.

How to Create a Day Trading Journal

The simplest method for creating a day trading journal is to setup an Microsoft Excel spreadsheet.  Within the spreadsheet should be the following columns:

Type of Trade: Long or Short

Date/Time

Symbol

Price

# of Shares

Profit

Commissions

Net Profit: Profit - Commissions

% Profit

Run-up/Drawdown: Displays max paper gain/loss

Did I follow all my rules?

What was done right in the trade?

What was done wrong in the trade?

What to Learn from the Day Trading Journal

When looking at your trading journal you can approach it from two angles.  The first angle being the monetary side and the second day trading methodology.

Monetary

The numerical breakdown of your trading activities is more than just numbers.  You will be able to quickly see if your trades are profitable, whether you make more money shorting or going long, and if using more money affects the way you trade.  One of the columns of most use is the run-up/drawdown as it shows you if you are giving back gains or are taking to large of a drawdown in anyone trade.

Day Trading Methodology

More importantly than the numbers, how well did you measure up to your trading methodology?  Did you follow all of your rules that give you your edge?  This is the real meat behind the day trading journal.  The trading journal is only as good as its input.  So, if you lie to yourself in your journal, your trades will not improve.  However, if you are truly honest about your shortcomings, you will begin to see a pattern in your trading.  Your flaws will be exposed and you will be able to consistently tame the beast of fear and greed which we all face on a daily basis.

 

Al Hill Administrator
Co-Founder Tradingsim
Al Hill is one of the co-founders of Tradingsim. He has over 18 years of day trading experience in both the U.S. and Nikkei markets. On a daily basis Al applies his deep skills in systems integration and design strategy to develop features to help retail traders become profitable. When Al is not working on Tradingsim, he can be found spending time with family and friends.
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  • This is good advice – I wholeheartedly agree that everyone should keep a trading journal. I found my journal to be the most valuable learning tool I have.

    I’m a touch biased :-), but it’s worth taking a look at Tradervue (http://www.tradervue.com).  It’s a new (free) web app that launched a couple of weeks ago, designed specifically for helping traders keep their trading journal, and automating some of the busy work that goes into it.  And once you have your data in there, you can see analysis of what’s working and what isn’t, and even share some of your trades with the community if you wish.

    Reply

  • This is good advice – I wholeheartedly agree that everyone should keep a trading journal. I found my journal to be the most valuable learning tool I have.

    I’m a touch biased :-), but it’s worth taking a look at Tradervue (http://www.tradervue.com).  It’s a new (free) web app that launched a couple of weeks ago, designed specifically for helping traders keep their trading journal, and automating some of the busy work that goes into it.  And once you have your data in there, you can see analysis of what’s working and what isn’t, and even share some of your trades with the community if you wish.

    Reply

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