A trading journal: why no learning happens without one

Six months after a trade almost nobody remembers why they made it. They remember only how it ended — and construct the reason to fit the result.

What that breaks

Learning. Telling a good decision from a good outcome is only possible if you know what you thought before the outcome arrived. Without a record every profitable trade looks considered and every losing one looks like bad luck.

What to write down

The date and the price — the broker keeps those anyway.

The reason: what the expectation rests on. One or two sentences.

The refutation condition: what would have to happen for you to admit the hypothesis was wrong — A strategy without exit rules is not a strategy.

The expected horizon.

Your state: were you in a hurry, was the decision a reaction to a price move. That line often turns out the most informative.

What to do with it later

Reread it every six months. Look not at the returns but at recurring phrases: if a third of the entries say "bought because it is rising", the problem has been found — Fear of missing out: why people buy at the highs.

The format

Any, as long as the note is made before the trade rather than after. A table, a note, a comment on a position in a watchlist — How to build a watchlist and set up alerts.