What you do not measure, you cannot improve. A journal turns a string of trades into something you can learn from.
What to record for each trade
- The date, time and instrument.
- Direction, entry, stop and target.
- Size, and the percentage of the account you were risking.
- Why you took the trade: the setup you saw.
- How you felt before and after.
- The result, in money and in R, meaning multiples of the amount you risked.
- What you would do differently.
Reviewing it
Once a week, read your entries and look for patterns: times of day with more losses, trades taken straight after a loss to win it back, or setups that keep repeating.
A number worth knowing: expectancy
Expectancy is what an average trade is worth over many trades: (win rate x average win) minus (loss rate x average loss).
Example. You win 40% of trades, averaging 2R, and lose 60%, averaging 1R. Expectancy = (0.4 x 2) - (0.6 x 1) = +0.2R per trade.
So a method can work with a low win rate, and a high win rate can still lose money if the wins are small and the losses large. Small samples mislead, so judge over many trades.
This is general information, not advice. It does not consider your situation, and trading carries a high risk of loss.