A trading journal is one of the best ways to improve your trading. Traders should have a trading journal where to write down their trading operations. This helps explain why we perform an operation and takes account of our successes and failures. You can use the following template:

  • Opening date
  • Closing date: it will be empty if the trade has not yet closed.
  • Asset: it can be a company, an index,…
  • Type of operation: open long or short positions.
  • Reason: To complete this field you can copy the text of the column. “Justification” that appears on our website.
  • Buy price
  • Sell price
  • Stop loss
  • Stop profit 
  • Reward-risk ratio: is determined by the stop-loss and stop-profit.
  • Result: ↑ (success) oo ↓ (failure). It will be empty if the transaction has not yet closed.
  • Profitability: it must be filled after closing the trade.
  • Comments: anything you want to highlight of this trade.

Example:

  • Opening date: 24 /10/2014
  • Closing date: 10/03/2015
  • Asset: Apple Inc. (Ticker: AAPL)
  • Type of operation: abrir largos
  • Reason: I have opened long positions because of the following reasons:
    • The asset is bullish in long, medium and short term.
      • ST: Bullish trend with 90% certainly
      • MT: Bullish trend with 100% certainly
      • LT: Bullish trend with 100% certainly
    • Good entry point because the price is at a support level.
  • Buy price: 105$
  • Sell price: 126$
  • Stop loss: 10%.
  • Stop profit: 20%
  • Reward-risk ratio: 2:1  (the potential gain,  defined by a stop profit of 20%, is twice that possible loss, delimited with a stop loss of 10%) .
  • Result:  ↑
  • Profitability:  +20%.
  • Comments: I closed the operation when the price touched a long-term resistance.

Summary of the Lesson: open a Word document or an Excel spreadsheet and create a template by copying the template we present in this lesson. Each time you open a trading operation copy that template and fill it. When you close the operation fills the missing fields (closing date, sell price, result, profitability and  comments). This will help you follow your trading system in a methodical way and put aside emotions.