Journaling trades is one of the most important things we do as traders because it gives us the opportunity to reflect upon the trades we take, and also allows us to reflect upon the emotions we experience as traders when we’re getting involved with the market, for better or for worse.
We all know trading is no easy walk in the park, especially when starting out. However, journaling your trades on top of trying to learn a strategy is just another essential skill you’ll need to pick up and master to help you stay aware of what you’re doing as a trader. Luckily this is one of the easier skills to learn, and in this article we’ll be covering everything you’ll need to learn how to journal your trades for forex, stocks, and cryptos in an efficient manner.
Why Journaling Trades Is Important
Journaling your trades is extremely beneficial to your trading. You’ll get a feel for what emotions you’re experiencing when you’re trading in the live markets. Just as people keep a personal journal for reflecting on events or emotions they go through in life, it’s smart to keep a trading journal to keep a record of what we’re doing in the market.
Journaling To Keep Track of Your Trades
If you’re starting out this is a very important process to get in proper working order early on because otherwise you’ll take trades and whether they fit your plan or not, you’ll have 0 record of them and likely forget what trades you took and why you took them, especially if you take a lot of trades. Later in this article we’ll discuss some of our favourite tools for journaling trades so you can keep track of the reasons you got into a trade, plus your P&L. Not only that, but if you ever want to go back and review trades you’ve taken to find common patterns in your winners and losers, you’ll have the ability to do that with the data you collected.
Journaling To Keep Track of Your Emotions
Keeping a journal for keeping a pulse on the emotions you experience is equally as important as keeping a standard journal for documenting your trades, because this will give us insight into what we’re feeling and how we’re reacting to those emotions, as well as how it affects our decisions. Writing down how we’re feeling before, during, and after a trade is definitely not the easiest thing, especially when we’re simultaneously trying to execute a trade without making any small mistakes, but this is the most effective way to do it. What we suggest is if you find it to be too difficult to write all of your thoughts and feelings down while trying to enter a trade, keep it short, simple, and maybe just write about it once the trade is fully closed, or when you have time to make an entry in your journal while still in the trade and you’re actively managing it.
We at Phantom Trading are strong believers in journaling, so even if the notes you take on your emotions are very basic, it’s better to do it that way and build the habit, rather than not do it at all! Believe it or not, journaling is the most glossed over skill in trading, because people view it as a chore, but we view it as a necessity and actually enjoy doing it, since we know it helps us improve as traders by maintaining awareness on all fronts.
How Journaling Will Help You Understand Your Emotions
For most people, journaling is a tool that helps them to organize their thoughts and emotions. Whether or not they’re traders, journaling is the best way to bring what you think and feel into the real world. As it relates to trading, it will help you to identify the unique set of emotions you’re experiencing as a trader at the current point in your journey so you can learn to process and embrace them in a way that helps you rather than being reactionary and having your emotions work against you. Of all of the emotions that we experience as human beings living life, they are definitely amplified for traders especially when starting out, because trading can be a very stressful experience.
While this isn’t always the case for every trader (new or old), most traders go through a trial by fire phase which can be very emotionally demanding. This is likely when you’re still learning how to consistently trade your plan (notice I don’t say profitably), and you’re experiencing heightened emotions that you’re not accustomed to feeling or processing. Journaling will help with all of this. The first step to resolving and processing emotions is by being acutely aware of what you’re telling yourself and how you feel about it.
Unfortunately, because trading can be very counterintuitive, and a lot of people come into trading with preconceived ideas or a flawed belief system that will make it harder to find consistency in their trading, many people quit before they even scratch the surface of breaking down their emotions in an impactful way. At Phantom we truly believe and have experienced first hand that learning to resolve and understand our emotions in trading crosses over into our life in a very positive way. You’ll learn to be more patient, more calm, collected, and more level-headed when it comes to stressful or painful negative emotions you may encounter in your everyday life outside of trading. If that doesn’t sound like a sweet deal (learning to trade while also becoming more emotionally intelligent), then trading may not be the profession for you.
The Best Trade Journaling Tools
When it comes to trade journaling, having the right tools to make the process easier for yourself is super important. If it’s a pain in the butt to journal your trades, then more likely than not you just won’t do it. Again, the goal here is to make things as simple as possible so you build the habit and eventually you’ll grow to enjoy the process of journaling.
Journaling With Pen and Paper
To start off we have the classic pen and paper. While this isn’t the best tool for journaling the technical side of your trades, it’s a fantastic tool for getting your thoughts down on paper in a quick and natural way that is always easily accessible. For most of us on the Phantom team, we opt to keep a written journal that pairs with a digital journal for our trades because we believe there is an emotional and cognitive benefit to it versus typing about our emotions on a computer. Ultimately it boils down to the trader and whether or not you decide to use a physical journal, but it’s a medium that shouldn’t be glossed over just because you can do it on a digital device.
Journaling With Notion
Next on our list is using Notion (a free cloud-based note taking tool) that allows you to do anything from writing, to saving images of your chart analysis and trades, and even has a useful database tool that can be used for keeping a very organized record of all of the trades you’ve ever taken! At Phantom Trading we’ve taken it a step further and I’ve actually put together some Notion Templates over the last couple of years as a team member at Phantom for the community so they’re able to more effectively journal their trades. While we charge money for the notion templates to the public, you can get access to all of my notion tools and resources for free if you’ve got a Phantom Trading membership!
Believe it or not, I actually still use my notion templates for journaling to this day, and originally created them out of necessity because my old system for documenting my trades and emotions was downright horrible! When I first started trading, I actually used an excel spreadsheet and word doc to document all of my trades which was a huge pain because the system was extremely clunky and annoying to use. This is what you want to avoid especially when trying to build the habit up, because if it’s difficult to journal your trades, again, you probably won’t spend the time to do it.
How To Journal Your Trades Using Notion
Journaling your trades using Notion is actually a breeze, and it’s what most of our Phantom members do because it’s simple and intuitive. Gone are the days of pasting chart screenshots into a word doc and entering information about the trade in an excel spreadsheet! Whether you’ve purchased the templates I created above, or you want to try to create your own system in Notion, I promise it’s super easy. In fact, I’ll quickly explain how I created my templates so you can build them yourself if you choose to.
Phantom Trading’s Notion Trading Journal Template
If you have my templates either from gumroad or you’re an existing Phantom member, or plan on joining Phantom soon so you can get access because it’s included as a freebie in the membership, don’t worry – there is documentation plus, you can watch the video at the top of the page to learn how to use my template.
Building Your Own Notion Trading Journal
If you want to bootstrap it and build a tool in Notion yourself, here is how I did it.
All I did was create a database with all of the necessary metrics and tags I needed to help me accurately document my trades, and used the “calendar view” in that notion database to organize my trades in an easy to use calendar system, showing me exactly what trades I took on any given day.
The nice thing about notion is that despite using it as a calendar, I can quickly switch it over at any time to a standard database view and see all of my trades in a simple list with all of the tags and metrics I mentioned before. Aside from that, I also created templatized database entries or “cards” with headings and labels corresponding to screenshots that I typically take of my analysis and trade setups, plus a section for journaling about my management and my emotions before, during, and after the trade.
It’s really that simple. Watch or read a few tutorials on how to use notion and almost anyone can put together a simple journal system that works for them.
The Importance of Doing End of Day Trade Markups
Lastly, we’re going to discuss the importance of doing end of day trade markups, or recaps as some traders call it. While this isn’t necessarily considered journaling, I wanted to include this little tidbit for all of you new traders because it’s a habit I wish I started doing early on in my trading career. Everyone on the Phantom Trading team agrees, this one habit really helped them to learn the Phantom Trading strategy and to hone their skills. Doing end of day trade recaps and markups not only helps you keep an up to date pulse on what the market is doing, but it also trains your brain to recognize setups that you may have missed during the trading day!
So, you’re probably wondering, how do you even go about doing an end of day markup? It’s fairly simple, but admittedly it’s going to be time consuming for most new traders if they’ve never done it before. We suggest allocating at least 1-2 hours of your time per trading instrument that you trade to sit down and do your analysis all over again from scratch and also to bar replay through the day to really understand how you would have applied your trading plan and edge to the market, and to see if there were any valid trade setups for the day.
When you get to a certain level you may want to switch to actively forward testing as you trade in the live market, meaning you’ll mark things up and take trades or not based on your plan, but if you’re new to trading we suggest following the more intensive process of starting from a completely fresh chart every time you do a daily recap in order to help you build your analysis and markup skills.
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Robert Castillo @coldwaterfx FX Trader & Analyst Writer & Editor
Rob is a funded trader from Toronto, Canada, and has been trading currencies, commodities, stocks, and cryptocurrencies for over 7 years. Outside of trading, he enjoys making music, boxing, and riding motorcycles.
