Key Elements of a Trading Journal (Entry, Exit, Position Size, Notes)

Every trader has been told to maintain a trading journal. But the important question is, “What exactly do I write down?” A journal should not be a multi-page diary of endless numbers. Rather, it should simply be a concise, organized record of your decisions and observations. When written correctly, it can unearth unseen strengths, point out patterns of recurrent mistakes, and help you develop a long-standing consistency.

There are four essential elements that every trading journal must record: Entry, Exit, Position Size, and Notes.

Entry: Capturing the "Why" of your trade

Now, your entry is more than just the price you bought it at or sold it at. It is the "why" of your entry. Did you see a support bounce on EUR/USD? Did there happen to be a news event that pushed GBP upward? Or maybe you were testing a moving average crossover system.

When you write down your entry arrangements, you are accepting accountability for your trade. An example could look like:

"I bought EUR/USD at 1.0720 as a bullish breakout above resistance occurred. The trend appeared to be supported by strong U.S. data earlier.”

At a later date when you review this trade, you will be better equipped to determine if the "why" part of your trade reasoning was sound or if you acted on impulse. If you did not write it down, the reasoning slips away very quickly.

Exit: More than Numbers

Exits are often where emotions hijack strategy. A trader entering let winners run can cut their winners prematurely from fear, while traders losing trade sometimes let losing trades run just hoping it turns around.Keeping track of your exit—both regarding price and timing—will facilitate a more objective analysis of those choices.

For example:

"Exited at 1.0685 after price fell below the moving average. Was going for 1.0750, but tightened up on the stop after the U.S. Fed made their statement."

Now looking at your exit compared to your plan, you can see if you are regularly leaving money on the table or if you are ignoring your stop-loss. Over time, this will help you build stronger habits.

Position Size: Protecting Your Account

Position size is easily one of the most overlooked details when it comes to trading journals, but it is crucial. The lot size you choose directly correlates to your risk and potential reward. By recording it you will notice if you are consistently maintaining discipline with your risk management or if your excitement is driving you to risk too large of a position.

For example, if your rule is to risk 2% of your account per trade, after you see a number of journal entries where you have risked 5% or more, you will catch on. Without logging the size of your trades, you might not realize you have strayed away from your rules until you have lost a sizable amount.

The following is a simple way to track it:

The table laid out above allows for ease of spotting your position size and if it is creeping out of your rules.

Notes: The Unknown X-Factor

Numbers tell part of the story, but our notes add on the other layer. Think of this section as your personal reflection area. You can write about how you felt, what you thought about the market environment, or what distractions you were dealing with.Did you feel anxiety because you had just suffered two losses in a row? Did you feel assured because your analysis lined up with the news? 

Example: 

“Felt high pressure because I missed the move we saw yesterday. Entered before I planned. When looking back, I realize it was more FOMO than strategy." 

These notes are pure gold. In time, they will show you how emotions affect your decisions. You may realize that you trade poorly after having a stressful day or you perform best when you have your morning routine. Gaining self-awareness leads to discipline rather than risking our fate as traders. 

Putting It All Together

Creating a trading journal does not have to be sophisticated. With those four elements - entry, exit, position size, and even notes - you will have a journal that does not merely convey a record of your trades or performance, but also can teach you about yourself. The goal is never to be perfect, it is to progress. Each entry will provide a clearer picture of your habits, strategy, and mental model. 

Think about it in terms of a personal trading library. Each page of your journal will tell you the story of where you were at, what you were looking at, and how you reacted. Month after month, year after year, it will become a reference tool you can always review when you need a refresher - a map of your growth as a trader. 

Final Thoughts

Keeping a journal may sound like busy work, but it's one of the smartest investments you could ever make in continuing your growth. Writing it out creates the necessity to slow down, reflect, and take your trading more seriously. Over time those little notes will develop a better discipline, better risk management, and ultimately better results. 

If you are looking to refine your trading skillsets and build sustainable habits, set aside some time each trading day to journal. For more daily actionable strategies to enhance your trading journey, check out the Learn section on Wikilix, there are plenty of useful strategies to help traders like you thrive and grow in confidence.