That question has a straightforward solution. EVERYTHING!
You keep a record of everything you think and do prior to the trade, during the trade, and following the trade.
Whatever your trading approach or style, trading is a performance skill.
Your success depends on your ability to evaluate the market environment, develop a plan or trading approach, execute that plan well, and be lucky.
Since there are numerous factors that contribute to success, you must list them all in order to assess your strengths and weaknesses.
What to Write Down in your Trade Journal
Who you are and your motivations for forex trading.
To find the right trading method for you, you have to know who you are, your lifestyle considerations, and why you do the things you do.
Market views and philosophy.
This is how you understand and frame the markets, and how you make the decisions to act and manage the risk to your account.
Observations of the market.
Each day is different in the market, but that doesn’t mean there are certain “tendencies” or “behaviors” that you can take advantage of. With careful and consistent observation, you can find these “tendencies” and create or adjust your strategies to them. Also, if the environment changes, you’ll be on top of the situation and change with it!
Trading mistakes and missed opportunities.
Mistakes and missed opportunities are just as detrimental to your success as the market going against your trade. Closing trades too early, not taking legit setups, entering the wrong entry levels or position sizes, etc. should be recorded in your journal so that you avoid the same mistakes in the future.
Many aspects of your forex trading performance can be quantified into hard data. This gives you a realistic, no BS picture of how you’re doing. And sometimes a shot of reality can give you the kick in the butt you need to kick up your game.
In all honesty, this seems like a lot. So here is what we believe to be the absolute minimum to help you get started. A trading journal’s “must-have” components.
We just want to make clear that this is what we think should be in a trading plan before we release our list.
We only offer this list so you may get a better sense of what to put in your own plan; you are not required to stick strictly to the items on it.
The Bare Minimum: 5 Things You Must Keep in Your Trading Journal
All right, here are our 5 “must-have” elements of a forex trading journal:
1. Potential trading area
2. Entry trigger
3. Position size
4. Trade management rules
5. Trade retrospective
Keep in mind that keeping a forex trading journal is for your own profit. So, make a note of what you believe would be most beneficial to you!