Learning professional journal writing, especially for prop traders, is one of the fundamental pillars of success in trading. Journal writing helps traders accurately record their strategies, plans, and the details of their current and past trades, allowing them to analyze and review their trading paths when necessary.
A trading journal is a vital tool for every professional trader or even a beginner who wants to follow their trades in a purposeful, measurable, and analyzable way. This journal can be physical (notebook) or digital (Excel file, Google Sheets, or specialized software), and its purpose is to accurately document the details of each trade, analyze performance, and enhance trading skills.
A typical trading journal includes information such as the date and time of entry and exit, the trading symbol (e.g., BTC/USDT or EUR/USD), the position type (buy or sell), the entry and exit prices, trade volume, stop loss, take profit, final profit or loss, and the risk to reward (R/R) ratio. Additionally, the reasons for entering the trade (e.g., based on technical analysis, news, or market sentiment) and the trader’s emotional state (e.g., anxiety, confidence, or haste) are also recorded. At the end of each trade, the trader can note important points or lessons learned to avoid repeating similar mistakes in the future or to replicate successful strategies.
The importance of journaling in trading lies in the fact that this tool helps traders identify their repetitive mistakes, review past performance, find the strengths and weaknesses of their strategies, and also gain better psychological control over the market by reflecting on their emotions and reactions. Journaling is essentially a bridge between simply trading and trading professionally; a place where every decision is recorded and reviewed, allowing the trader to learn from their experiences and adjust their path over time.
Having a professional journal not only creates mental and financial discipline but also reduces the likelihood of emotional trades and provides the trader with a more analytical view of the market.
A trading journal may seem like a history or a list of trades, but in reality, these journals are personal and powerful analytical tools that must be written properly and according to specific principles to help increase profitability and reduce trading losses.
A prop trader should keep a clear and understandable journal of their trading behavior, decisions, emotions, and the results of each trade. This journal can serve as a practical guidebook in the long term to identify repetitive mistakes, optimize strategies, and even manage emotions during trades. Some of the most important items that should be recorded in the trading journal include:
The most important part of professional journaling for prop trading is the accurate and precise recording of general trade information. First, the date and time of the trade should be recorded. This includes the day, date, hour, and entry/exit time of the trade.
After recording the date and time, you should carefully note the trading symbol in your journal, such as BTC/USDT, EUR/USD, or Gold.
Finally, as the last part of the general trade details, you should record the position type and lot size of each trade, especially the ratio of the lot size to the prop account's capital.
After recording the general details, it's time to enter more specific information about the entry and exit points of the trade. This section includes the exact entry price, exit price, final profit or loss, and the stop loss and take profit levels set for the trade. Additionally, the risk/reward ratio should be clearly recorded. This ratio shows how much risk was taken in each trade and what potential profit was expected in return. Regular understanding and analysis of this section help in identifying successful or high risk patterns and optimizing capital management.
Successful trades are based on a well defined logical strategy. When recording the method and reason for entering trades, you should clearly state why you entered that specific trade. Did you make the decision based on technical analysis, such as observing a specific candlestick pattern or a resistance breakout? Or did fundamental information, an economic news event, or a particular occurrence influence your decision? If you traded based on price action or a specific strategy, it’s better to also note the name and conditions of that strategy. Having this section helps you evaluate the logic behind profitable or losing decisions in the future.
One of the most crucial aspects to focus on in a trading journal is your mental and emotional state when entering, managing, and exiting the trade. Did you enter the market with complete calm, or were you influenced by anxiety, haste, or even excitement? Was your decision a result of a previous loss, creating an emotional or revenge driven reaction?
Recording these emotions and conditions during the trade helps you identify emotional behaviors and gain better control over your trading psychology in the future, which is essential in the world of prop trading.
Recording the results of a trade should not be limited to just the amount of profit or loss. More importantly, it is essential to analyze the cause of success or failure and extract a useful lesson from that experience. In this section, you should note what contributed to your success or which incorrect decision led to the loss. Did you follow your strategy correctly? Did you make an analytical mistake or deviate from your capital management plan? You can also write recommendations for yourself for the future: if a similar situation arises, what could you have done better? This section is where experience transforms into knowledge.
A trader's personal journaling serves as the foundation and main source of the reports they submit to the firm. The more precise, organized, and analytical the journal, the more professional and credible the reports sent to the firm will be. A journal not only helps the trader understand their performance but also demonstrates their mental and trading maturity to the firm.
Many prop trading firms consider traders who maintain regular journaling as reliable and responsible individuals, prioritizing them when allocating capital, offering promotions, and providing special opportunities. Therefore, personal journaling is not only a tool for personal growth but also a part of the professional process of communicating with the firm.
Journaling becomes a powerful tool when we go beyond simply recording information and analyze the data accurately to enhance our trading performance. Many traders note down their trades, but only those who view their journal as a valuable resource for reviewing, evaluating decisions, and refining their trading strategies gain real benefits from it. This approach allows them to identify their strengths and weaknesses and continuously track the improvement process. Here are some key actions you should take to review and utilize your journal effectively:
Journaling becomes a powerful tool when we go beyond simply recording information and analyze the recorded data accurately to improve our trading performance. Many traders note down their trades, but only those who view their journal as a valuable resource for reviewing, evaluating decisions, and refining their trading strategies benefit from it. This approach enables them to identify their strengths and weaknesses and consistently follow the improvement process of their trades.
Every trader has a set of behavioral patterns they acquire over time. These patterns include both correct and incorrect trading behaviors, and if they are not recognized, they can lead to heavy and even irreparable losses, especially in prop trading. In prop trading, not only the trader's capital is at risk, but also the company's capital, and repeated errors can lead to missed opportunities and even dismissal from the firm. Therefore, being fully aware of these patterns and managing them not only prevents recurring mistakes but also helps the trader improve correct behaviors, ensuring a more consistent and stable performance. This will allow better decision making in stressful market conditions. Using tools like a trading journal to record and analyze these patterns is the key to success in improving the trading process.
By having accurate data recorded from each trade, you can compare and evaluate the performance of different strategies. For example, you may notice that a breakout setup at resistance is more profitable for you than a bounce from support. Or you might find that strategies executed with confirmation from multiple indicators have higher returns. The journal allows you to decide which approaches to strengthen and which to eliminate or modify.
By analyzing journal data, one may reach conclusions that wouldn't remain in memory on their own. For instance, one might realize that they perform well on the EUR/USD pair during the London session, but perform worse in the Asian market or on other symbols.
Accurately recording emotions, thoughts, and internal reactions when entering and exiting trades plays a very important role in a trader's self awareness. This process helps the trader recognize their emotional behavioral patterns and avoid repeating mistakes caused by emotional decision making.
Additionally, recording these matters prevents entering revenge trades or making hasty decisions, which typically lead to financial losses. Thus, journaling acts as a psychological feedback tool and helps stabilize the trader’s mindset, making it more professional and calm.
By analyzing journal data, one may reach conclusions that wouldn't remain in memory on their own. For instance, one might realize that they perform well on the EUR/USD pair during the London session, but perform worse in the Asian market or on other symbols.
Accurately recording emotions, thoughts, and internal reactions when entering and exiting trades plays a very important role in a trader's self awareness. This process helps the trader recognize their emotional behavioral patterns and avoid repeating mistakes caused by emotional decision making.
Additionally, recording these matters prevents entering revenge trades or making hasty decisions, which typically lead to financial losses. Thus, journaling acts as a psychological feedback tool and helps stabilize the trader’s mindset, making it more professional and calm.
The first step to starting professional journaling in prop trading is selecting the right tools, notebook, or platform for recording it. Since journaling is a daily and long term process, lacking the right tools may lead to fatigue or incomplete entries. Additionally, the tool or notebook chosen for journaling should be both functional and user friendly.
| Tool Type | Advantages | Disadvantages | Suitable For | ||||
| Paper Notebook | Easy access in any situation | Realistic writing experience and better focus | Ability for quick and free note taking | No search or quick categorization capability | Risk of getting lost or damaged | Requires manual entry into software | Those who prefer handwritten notes or are beginners |
| Excel / Google Sheets | Ability to filter, sort, and analyze data | Free and easily accessible Synchronization between devices | Requires basic knowledge for formula writing and formatting Can be tedious for entering large amounts of data | Professional traders with intermediate computer knowledge | |||
| Specialized Trading Journal Software (e.g., Edgewonk, TraderVue) | Advanced automated analysis tools | Graphical and statistical reports | Support for importing data from brokers | High cost | Can be complex for beginners | Professional traders and prop traders who want fast growth | |
| Mobile Applications (Evernote, Notion, OneNote) | Ability to quickly log even while on the move | Ability to attach photos, screenshots, and audio | Search and categorization capabilities | Might have formatting limitations | Reliance on internet or devices | Those who want to have a journal always with them |
Trading journaling is not just a logbook for prices; it should encompass the entire thought process, emotional state, and technical aspects of the trade to help you improve your skills.
| Item | Description and Importance | Practical Examples |
| Date and Time of Trade | For a more detailed analysis of performance across different timeframes and market conditions. | 15/03/1402, 10:45 AM |
| Symbol | For analyzing different symbols and focusing on the best markets. | BTCUSDT, EURUSD, AAPL |
| Type of Trade (Long/Short) | Determines the direction of the trade to evaluate strategies in different market trends. | Long (Buy) or Short (Sell) |
| Entry Price | The basis for calculating profits and losses and determining the effectiveness of your entries. | $30,500 |
| Trade Volume | Used to calculate risk, capital management, and the amount of risk in each trade. | 0.5 BTC, 100 Shares |
| Exit Price | The final result of the trade and the measurement of performance. | $31,000 |
| Profit or Loss | Helps in evaluating strategies and capital management over the entire period. | +$500, -$100 |
| Stop Loss and Target | To evaluate compliance with risk management rules. | Stop Loss $30,200, Target $31,500 |
| Reasons for Entering Trade | Record the logical and technical reasons behind the trade, such as resistance break, divergence, or indicator signals. | Entry due to daily resistance break and RSI confirmation |
| Emotions and Psychological State | Record emotions and stress or calmness during the trade to manage mental state better in the future. | Anxiety, Confidence, Fear of Loss |
| Mistakes and Learning Points | Important lessons from each trade or things that caused losses to avoid in the future. | Early entry, stop loss too far |
| Strategy Used | For example, scalping, swing, news trading, technical or fundamental trading. | Range breakout strategy, price action trading |
Recording trading information can vary depending on the type of traders and their working hours. For example, in daily journal entries for prop trading, information should be recorded in an organized, accurate, and quick manner to prevent forgetting details and ensure the quality of the recorded data.
The best approach is to plan your day before the market opens, noting down the symbols you intend to trade, the strategies to be used, and your profit and risk management goals. During trading, immediately after each trade, record key data such as entry and exit prices, trade volume, stop loss and target, trade type, as well as your emotions and mental reactions. If recording in real time is not possible for any reason, be sure to enter all details into the journal by the end of the trading day.
Frequent and accurate recording of your emotions, such as anxiety or confidence, helps with the psychological analysis of trading and, in the long run, leads to better performance. At the end of the day, it's important to have an overall review of your performance, including the number of trades, total profit and loss, a check on how well you followed your daily plan, and noting the learning points and mistakes made during the day. This process turns your journal into a powerful tool for learning and growth.
Journaling and recording trading data are only half the battle for success in prop trading. Without proper analysis, the data remain a pile of meaningless numbers and cannot be used to improve decisions and performance. Therefore, a crucial step in improving performance is the regular and scientific analysis of the data.
One of the first steps in data analysis is reviewing the overall trading performance statistics. You should calculate your total profit and loss over different time periods such as daily, weekly, and monthly to identify the overall trend of profitability or losses. This helps you understand whether you've made progress during a specific period or if your trading performance has been declining. Also, observing overall trends allows you to plan better for the future and recognize the strengths and weaknesses of your performance.
One of the key metrics in performance analysis is the win rate, which represents the percentage of trades closed with a profit. This metric helps you understand how effective your trading strategy has been. If the win rate is low, you may need to review your strategy or evaluate other factors like risk management and trading psychology. The win rate is not the only metric, and it should be evaluated along with other indicators to provide a more complete picture of your performance.
Risk management is an inseparable part of successful trading. Therefore, you should consistently review metrics such as the average profit and loss per trade, the largest loss incurred, and the risk to reward ratio. These metrics help you determine if you've been effective in capital management and risk control. If the risk to reward ratio is inappropriate, you might end up losing even with a high number of successful trades. Thus, accurately evaluating these metrics can help refine your strategy and prevent large losses.
The next step in data analysis is to review trading trends. You must carefully analyze which symbols, timeframes, and strategies have worked best for you. Market conditions, such as bullish, bearish, or neutral trends, can also have a significant impact on trade results. By identifying these trends, you can focus on markets and conditions that have provided the best returns and avoid unfavorable conditions. This stage helps you fine tune your strategy in a more precise and targeted manner.
One of the important yet often overlooked factors in trading is the trader's psychology. Recording and analyzing your emotional states throughout trades can reveal valuable insights. For instance, you may have made poor decisions during stressful or overly excited moments, or on the contrary, performed better in a calm state. Recognizing the positive and negative emotions influencing your decisions helps you better control them and prevent negative psychological impacts on your trading.
Using charts and visual reports is a powerful tool for better understanding your data. By viewing graphs, you can see trends, strengths, weaknesses, and behavioral patterns more clearly. These visuals help you stay motivated to improve your performance and make more informed decisions. Additionally, graphical reports, as accurate documentation, provide the opportunity to compare performance across different periods.
Finally, careful data analysis allows you to correctly identify your successful and unsuccessful patterns. This understanding forms the foundation for creating operational plans to improve both individual and strategic performance in the future. Using the results of your analysis, you can implement necessary changes in strategies, risk management, and trading psychology, smoothing your path to progress. In this journey, consistency and repeated analysis of data are key to sustained success.
