A trading journal helps traders track their trades and thoughts throughout the day. It's a great tool, because a thorough journal includes details beyond what you can see on your brokerage statement. It includes what market conditions were like and whether you were distracted or made mistakes. It's also where you can record strategy ideas that may arise as you trade throughout the day.
All traders should keep a trading journal, but day traders don't have time to be spilling their guts on paper all day. Keeping a trading journal while trading—when the action is happening—actually could be counterproductive and lead to missed trades. There's an easy solution, though, that involves absolutely no handwriting and gives you a historical record of the exact market conditions you were facing on a particular day.
- A trading journal is an important tool for any day trader.
- Instead of a handwritten journal, use screenshots of your daily trading chart with typed annotations to capture what was happening and why.
- If you store these screenshots in organized monthly folders on your computer, you can review your trading history and make adjustments.
The Easy Way
A picture tells a thousand words. Instead of writing about market conditions, mistakes, what went well, and new strategy ideas, take a screenshot of the trading day with some typed annotations on it.
Most traders mark up their charts throughout the day, drawing lines and marking indicator levels that help them determine the trend and find possible reversal or target points. The chart shows the exact market conditions being traded. Intraday analyses can show your perception of the market that day—something that words in a trading journal never could describe as well.
A picture is an easy way to keep a trading journal, but you must include certain things to make it useful when you look back at it for review.
How to Mark Your Charts
These basic guidelines for marking up your charts will make them useful for future reference.
- Include an hour or two of price action before you begin trading, if applicable. This provides a context for what was happening when you started trading. You don't need to include price action from the prior day. Doing this can help you better assess time frames to watch while trading.
- Mark your start time with a vertical line or text note on the chart. It lets you know whether you started trading early or late, and why you may have missed some trade signals earlier in the day.
- Write down the times of major economic events you will be stepping aside for. When that time comes around, make a note again that you weren't trading because of news.
- Throughout the day, make text notes about tendencies and market conditions you notice. If you make an error, make a note of it. If you miss a trade, make a note of it.
- Keep as many trendlines and drawings on your chart as possible, assuming they don't distract you. They will help to show your future self how you were seeing the market in real time at any given moment.
- Mark when you stop trading for the day with a vertical line or text note.
- Type how many trades you made, how many were winners, the total profit for winning trades, how many were losers, the total loss for losing trades, and the net result. Avoid using dollars, which fluctuate based on position size. Instead, use pips for forex, cents for stocks, or ticks/points for futures. For example, if trading the ES Futures contract, instead of writing, "4 winners, $400; 4 losers, $200 = net +$200," write, "4 winners, 8 points; 4 losers, 4 points = net +4 points."
At the end of the trading day, take a screenshot of your chart, and paste it into a photo editor. It should include all of the information above. If you can't see everything on one chart, take two or three shots, and save them separately.
Save each day with the date as its file name, and keep them in a trading folder saved to an easily accessible location on your computer or in the cloud. Create subfolders for each year and month to make the files more easily searchable.
Reviewing Your Journal
At the end of each week and month, go back and see what you did, notice common problems, and spot your strengths. These observations can help you exploit your strengths and highlight the areas you need to work on.
Taking screenshots is more effective at capturing information than just writing in a journal. If you do want to write stuff down, you can do so right on your charts or keep a written trading journal as well. Be diligent in this routine so that you have every trade you make recorded.