A trading journal is an essential tool for any serious trader who wishes to make money. Many traders know its value but very few actually put it into practice. The ones that do write in a journal are the traders that are most often successful. A disciplined trader is a profitable trader, and keeping a trading journal is the first step to building your discipline. This might sound simple or easy but I assure you that to actually get started can be very difficult. In fact many traders give up after a while and rely on the logs that the broker provides. The logs or the history gives information that is at best marginally useful. Most of the time it gives information that is totally useless. What can you do with the past price actions? Nothing, the information provided gives you no new advantage to your next trade at all. A trading journal is not about writing in the prices of your entry and exit and the time you executed the trade. The trading journal is all about psychology, more specific it is about your individual emotional psychology before, during and after the trade. For example, you decided to trade the EUR/USD and based on your trading plan you went long. This despite of the fact that your gut feeling told you that the trade is not going to work. Still you followed your trading plan, half way through the trade the price comes to about a few pips away from your stop loss and you decided to quit the trade. So you exit the trade. A few moments later the price shoots to your original profit target. Had you stayed in the trade you would have made an X amount of pips. The information presented above is to help you write your journal. This is a classic case that probably happens a couple of times a day for most traders. We fail to stay in the trade, we fail to trade the plan and most of all we fail to distance our emotions from our trading! Give yourself a couple of these sorts of trades and I assure you, you will be seeing a big zero in your account soon. Your trading journal will assist you to prevent and to cure yourself of these bad habits. How that happens is that you record in everything you feel and do. From before the trade, to during the trade and after the trade had been completed. It is not difficult to keep a trading journal; you just got to remember some points - Everything goes in nothing is left out - Pay attention to your emotions when you write - Do not be embarrassed, you are the only person who will read your journal so be honest - Did I mention that you have to be honest and write everything inside, if you walked off to grab a beer, write that down and write why? - Nothing is too silly to record inside your journal. - Always begin the journal before the trade, and end it after the trade. The above points are important so keep them firmly in mind as you practice your journal. Here is a sample entry of mine: "1600 the EUR/USD is coming close to the set up. The larger trend is a down trend; the set up will be a short. Position size will be as normal 3% of account and profit objective 20 pips from entry, stop loss 10 pips. The news might be breaking in a few hours time the market is slow, don't know if I should take this trade or not, having some doubts here. 1615 entered the trade at 1.4567, profit target set at 1.4587, stop loss set at 1.4557. 1620 moved stop loss to 1.4567 the trade is now trading at profit. Feeling a lot better now, had a lot of doubts before I entered, the news was not very good. 1645 trade closed at profit took profit and ran! Happy that I did it, as prices shot down. Lucky I managed to make some money. Feeling rather excited for my next trade." The above example is what you should strive to keep each and every trade. Let's face it there is not a lot to do when we are in the trade itself so we have plenty of time to write. Learning to write will build discipline in you and when you reflect on your entries after a week of trading you will learn a lot about yourself and your trading psychology. This is something that no mentor or Forex school can teach you. You have to experience it yourself, only by this experience can you be a successful trader.