Should you start a trading journal?

In this article, you will learn about the benefits of keeping a trading journal.

  • Define your current and future financial goals
  • Comment on market reaction to trading events
  • Develop trading scenarios based on your observations
  • Add reminders about the stock market news you care about

Economic and financial news trading is not limited to simply adding up profits and losses. While these stats tell part of the story, they don’t include the day-to-day details of how you hit those numbers. The future you will probably be very grateful for the notes in your journal.

To start keeping a journal, you first need to decide how frequent you want your entries to be. You may wish to keep a daily or weekly journal to record your observations. It depends on when each event you are interested in takes place and how much time you have to write your comments.

While the profit or loss line is a summary, your trading journal is the complete story of when, how and why you achieved your performance.

Define your current and future financial goals

Every story begins with a beginning. So the first step is to set your current goals and update them based on your progress and results. Setting quarterly, half-yearly and annual goals is an option.

Financial goals include the amount of money you intend to invest and the target range of returns. For example, an initial investment of £200 in the first quarter with an expected return of 3-5%. You should always trade with money you can afford to lose, as trading involves risk. Then adjust the numbers based on your performance.

Comment on market reaction to trading events

Every market event is subject to a market consensus, which contains useful information about analysts’ expectations. For example, when the UK publishes its latest economic growth figures, this is an important event around which analysts have built forecasts.

You’ll find market news and forecasts on Admiral’s Forex Calendar.

Develop trading scenarios based on your observations

Your observations of how the market reacted to each event can be valuable information when building trading scenarios.

Were the results surprising? If so, note how the market reacted, how much prices moved and in what direction. Were the results the same or close to analysts’ estimates? Note how other traders reacted and whether prices fluctuated.

Developing negative, positive and neutral scenarios can help you decide where to add stops to your orders and spot potential entry and exit points.

For example, you can view technical analysis charts and take screenshots that you can add to your journal as a reminder.

Write down all the tools you used that may come in handy in the future when you rack your brain to remember them.

Bottom line: It’s worth taking a step back and finding time to record market reactions.

Find important business news events

Market news is full of important events and it’s up to you to choose the ones that interest you the most. Much depends on your experience and knowledge. As a beginner, you may want to attend Admiral’s training webinars to get some basic knowledge before you start trading.

Typically, the main events that move the market are gross domestic product (GDP) releases, employment reports, industrial productivity reports, service sector performance indicators, as well as corporate interest rate decisions and monetary policy statements from the central bank. Once you’ve decided which ones interest you, add them to your calendar and trading journal.

Additional notes in your journal for the future could be the name of your favorite analyst and your most trusted source of information.

Schedule high-impact event reminders

Timing is important when trading news events, as prices can move before, during and after the release of an economic report. By scheduling reminders a few days before the release, you have time to prepare your trading scenarios and do your research.

In summary, news events are an important component of market structure and it is worth keeping a journal of your experiences to support your strategies and trading routines.

Interested in news trading? Learn how it works with our free webinars where you can chat with professional traders and watch live trading sessions.

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This content does not and should in no way be interpreted as containing investment advice or recommendations, an offer or a solicitation to trade in financial instruments. Please note that this marketing communication is not a reliable indicator of any current or future performance as circumstances may change over time. Before making any investment decision, you should seek the advice of independent financial advisors to ensure that you fully understand the risks involved.

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