How to Keep a Trading Journal: What to Capture Before, During and After a Trade

A simple model: a flight recorder for decisions

Think of a trading journal as a flight recorder. It does not decide whether a flight was good. It preserves the information available, the inputs made and what happened next, so someone can reconstruct the sequence later.

Trading has the same three-part timeline: What did you intend to do? What did you actually do? What was the result? When those layers are mixed together, the outcome starts rewriting the earlier decision.

The model has a limit. A journal only contains what you record. It cannot prove that a strategy works or identify the cause of a win or loss by itself. It creates an inspectable trail, not an automatic diagnosis.

What job does a trading journal perform?

A broker confirmation documents the transaction. FINRA lists the transaction date, execution price and quantity among the key details on a confirmation; execution time and costs may also appear depending on the security and transaction. Those fields tell you what was executed.

A journal adds the decision context that a broker record cannot know:

The benefit does not come from writing as much as possible. It comes from using the same decision fields across comparable trades.

Before the trade: create a fair comparison point

Before entry, you do not know the outcome. That makes it the cleanest moment to preserve the decision in its original form:

1. Thesis: Which market assumption supports the trade?
2. Counterargument: Which plausible development challenges it?
3. Structure: Which strategy, expiration and legs express the idea?
4. Size: Which position size follows from the risk budget?
5. Price: Which limit or execution condition will you accept?
6. Invalidation: Which observable condition would disprove the thesis?
7. Exit: What triggers profit-taking, loss control or a time-based exit?

“I think the stock will rise” is not yet a testable thesis. “The underlying remains above 98 through expiration; a close below 98 invalidates my assumption” gives the later review something concrete to compare.

During the trade: preserve the changes

A plan does not have to remain frozen. New information, a partial fill, a volatility jump or a changed risk condition may justify an adjustment. The important point is to preserve both the old and new decision.

For each material change, record:

• the time,
• the number or rule affected,
• the new information,
• the action taken,
• the added or reduced risk.

“Moved the stop” records only the action. “Moved the stop from 1.05 to 0.85 because the planned technical reference remained intact” also preserves the reason. The review can then test whether that reason was consistent with the original process.

After the trade: separate process from outcome

Knowing the outcome changes how people look backward. Fischhoff's experiments on hindsight found that outcome knowledge could alter retrospective judgements even when participants were not fully aware of that influence. Baron and Hershey also found that people rated otherwise identical decision processes more favourably after good outcomes than after poor ones.

Neither study tested options journals, so neither supports a promise that journaling improves returns. They support a narrower practice: inspect the plan and actions first, then reveal or evaluate the outcome.

A basic review separates four questions:

1. Was the thesis clear and falsifiable before entry?
2. Did the position size stay inside the recorded risk?
3. Were changes supported by new information and documented?
4. What was the financial result after fees and slippage?

This lets a rule-compliant loss remain a possible good loss. A profitable rule break also stays available for review instead of becoming justified by its result.

A neutral journal example

Assume you planned a fictional bull put spread:

Before
Thesis: underlying remains above 98 through expiration
Counterargument: company announcement during the holding period
Maximum loss: €180
Size: 1 contract
Entry: limit credit of at least 0.70
Invalidation: daily close below 98

During
Fill: 0.72 credit; 1 contract
Day 6: underlying closes at 97.80
Action: position closed for a 1.68 debit
Reason: pre-defined invalidation condition was reached

After
Outcome after costs: –€98
Process: size, price boundary and exit condition followed
Open question: was the event check complete before entry?

The loss does not show that the spread was inherently unsuitable. Following the rule does not show that the thesis was sound. The record keeps those questions separate and identifies one specific gap for the next review.

How to look for recurring patterns

Do not start with a story broad enough to fit any three trades. Define the deviation you want to count before searching, for example:

• entry beyond your own price boundary,
• position size above the plan,
• adjustment without a recorded reason,
• rule-based exit versus urgency-based exit,
• recorded FOMO paired with a concrete plan change.

Compare records whose fields use the same definitions. Ten differently worded feelings are harder to inspect than the same question answered ten times: “Which number or rule did I change?” A cluster is a reason to investigate further, not proof of cause and effect.

What a trading journal does not mean

• More notes are not automatically better notes.
• Journaling guarantees neither discipline nor profit.
• A small sample cannot establish a durable strategy property.
• A recurring pattern does not automatically explain its cause.
• A memory gap is not a moral failure; it shows where an earlier record is missing.
• Broker data and journal notes serve different purposes and should not be confused.
• A journal does not replace risk management or understanding the strategy being traded.

Feynman check: explain the review without saying “journal”

Explain the process to someone who has never traded:

1. “Before I act, I write down what I expect, what could prove me wrong and when the idea stops being valid.”
2. “While it is happening, I record what was actually executed and why I change the plan.”
3. “Afterward, I compare the plan with my actions before I judge the win or loss.”

Check your explanation. If it omits the thesis, risk, execution, adjustment, reason or outcome, return to that section. “I write down my trades” misses the comparison logic. A promise that the notes will make you profitable claims more than a journal can deliver.

Questions for your next entry and review

1. Could another person repeat my thesis in one sentence?
2. Which observation would invalidate it?
3. Are maximum risk and position size recorded before entry?
4. Do the order, fill and fees match the broker confirmation?
5. Which number or rule changed during the trade?
6. Which new information supported that change?
7. Am I rating the process differently because I already know the outcome?
8. Which one consistently defined deviation will I inspect across several trades?

The lesson on position sizing and risk budgets helps define the fields before entry. FOMO, overconfidence and loss aversion shows how to turn an emotion label into observable evidence.

The seven no-trade rules provide another pre-entry filter for mechanics, execution and risk. A rule that applies can become one consistently defined deviation in the later review.

If you use MindTrajour, the documentation covers logging a trade, the Emotion Tracker and trade review. Those features keep parts of the process connected; they promise neither a specific learning curve nor a trading result.