DAY 29: The Importance of a Trade Journal

By DAY 28, we have learned mainly about a “hybrid operation” that combines discretionary trading with automated trading.

From today, as a new step, we begin Week 5 with the theme of “verification, verification, and more verification.” First, as DAY 29,focus on the importance of a trading journal.Let’s focus on DAY 29: “The Importance of a Trading Journal.”.

It is often said that keeping a trading journal is good, but surprisingly few people use it correctly.The advantages of a trading journal for “learning efficiency” and “mental stability”will be confirmed again, and we will introduce how to keep a journal and tips to keep it up.

1. Why is a trading journal important?

1. Allows objective reflection

   • During trading, emotions tend to run high, and there are many cases where one extends a loss or exits too early.
   • By recording in the journal, you create an objective “evidence” to review later, reducing ambiguity.
     
     

2. Clarifies your strengths and weaknesses

   • If you classify winning and losing patterns in the journal, you can clearly see which market conditions and entry reasons you are good at or bad at.
   • You can identify “weak currency pairs” and “times of day” and use them to improve and adjust operation.
     
     

3. Helps with mental management

   • Reviewing the journal helps clarify the causes of anxiety after a losing streak or the urge to revenge trade.
   • It creates a space to calmly consider “how to avoid repeating the same mistake.”
     
     

4. Makes updates to rules and logic easier

   • By correcting recurring failure patterns, trading accuracy improves.
   • Comparing with backtest results also reveals differences between real trading and testing.
     
     

2. Items to write in a trading journal

(1) Basic information

1. Date and time: Entry and exit timestamps and dates.
2. Currency pair: USD/JPY, EUR/USD, etc.
3. Trade direction: Buy (long) or Sell (short).
4. Entry price, stop loss, take profit: Actual execution rate and settlement rate.
   
   

(2) Trade justification & strategy

• Clearly state entry reasons such as “moving average golden cross” or “breach of resistance.”Entry reason
• Record the basis for stop loss and take profit (Fibonacci 61.8%, a touch beyond recent high/low, etc.) so it’s easy to review later.
  
  

(3) Result & P/L

• Record pips gained andprofit/loss so you can tally win rate and total P&L.
• If you also track the number of consecutive losses or wins, it helps mental analysis.
  
  

(4) Emotions & psychological state

• Describe emotions and decision processes at the time, such as “fear of buying at a high, late entry after a big drawdown,” etc.The emotional state at that time.
• Don’t turn a losing trade into “just a loss”; use it as fuel to improve the next trade, so psychological notes are important.
  
  

(5) Chart screenshots (if possible)

• A note app or handwritten journal is fine, but if you can include a chart image, it makes review easier later.
• Attach images of key points such as before/after trades and at entry/exit candlesticks to enhance understanding.
  
  

3. Tips for continuing a trading journal

1. Prioritize simplicity

• If you add too many items, it becomes cumbersome and you may stop quickly.
• As you get used to it, you can add more detail as needed.
  
  

2. Habit of daily or weekly review

• Right after trading, keep only minimal notes, and at day end or weekend take time to review carefully.
• Setting aside time for thorough analysis helps you see your habits and market swings from a bird’s-eye view.
  
  

3. Innovate your recording tools

• Choose what’s easy to use: paper notebook, Excel/Sheets, note app (OneNote, etc.), or dedicated tools (TradingView’s recording feature, etc.).
• Prioritize ease of maintenance. If you want to paste images or links, digital tools are convenient.
  
  

4. Analyze both successes and failures

• For winning trades, articulate why you won.
• If you only focus on failures, your mental state may deteriorate, so it’s good to also confirm strengths learned from success cases.
  
  

4. Practical examples using a trading journal

(1) Case of S: Substantial contribution to mental stability

1. Background: When losses pile up, anxiety grows and there is a tendency to shift stop losses.
   
   
2. Journal use：
   • Record each time in about three lines: “entry justification,” “stop loss basis,” and “emotions after exit.”
   • Review losing trades at the weekend and confirm that “if the initial stop loss had been kept, damage would have been smaller” before entering the next week.
     
     
3. Result：
   • Prevents self-destructive thoughts like “I’ll surely break the stop loss and average down.”
   • When you simply follow the rules, win rate increases and anxiety decreases.
     
     

(2) Case of T: Analysis progresses and focuses on winning patterns

1. Background: Trading was impressionistic, but win rate was unstable.
   
   
2. Journal use：
   • Always paste a chart screenshot at entry with the justification and the result.
   • After one month, analysis showed that a reversal strategy using Bollinger Bands + RSI won about 80% of the time.
     
     
3. Result：
   • Rebuild rules to focus on high-win patterns, reducing wasted trades and stabilizing the equity curve.
   • Realize that breakout-focused losing patterns may not suit you.
     
     

(3) Case of U: Helpful for managing hybrid operation

1. Background: Running EA and discretionary trading simultaneously made total P/L and position management complex.
   
   
2. Journal use：
   • Automatically record trades taken by the EA (export MT4 history) and manually add notes for discretionary trades.
   • At the weekend, compare “EA winning patterns” with discretionary winning patterns to decide next week’s lot sizing and on/off operation.
     
     
3. Result：
   • Clear understanding that the discretionary can compensate for EA weaknesses, reducing wasteful positions and stabilizing profits.
   • Managing discretionary trading and EA movements in one notebook makes risk assessment easier.
     
     

5. Summary & Next Preview

Summary

1. A trading journal is effective in many aspects, including improving win rate, mental stability, and refining rules.
   
   
2. Record items: At minimum, date/time, currency pair, direction, justification, result, and emotion are helpful for later analysis.
   
   
3. Tips to continue：
   • Use simple tools that are easy to maintain.
   • Make weekend summaries a habit.
   • Analyze both successes and failures in a balanced way.
     
     
4. Applications：
   • In hybrid operation, manage EA trading history collectively and optimize the coordination between discretionary and automated trading.
   • Identify your strengths and update your trading strategy accordingly.
     
     

Next (DAY 30) theme: Past verification – strengths and limits

• Next, we will deepen Week 5’s verification theme and explain the merits and demerits of “past verification.”
  
  
• With the combined approach of journaling and manual backtesting, there is much to learn from past markets, but there are also limits.
  
  
• Understanding the differences between past verification and real trading will reveal smarter verification methods. Stay tuned!

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https://www.gogojungle.co.jp/users/147322/products

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Thank you.