INTRODUCTION

A man who does not plan plans to fail. All of the successful traders have a comprehensive trading strategy with clearly spelt out entry and exit rules and a trading journal for the recording of all trading activities.

In this article I’m going to be sharing on how I have developed my trading journal on Microsoft excel. The journal workbook has three worksheets all containing different information that can be linked at times.

Sheet 1 – Strategy

Having the strategy is one of the fundamental things in forex trading. This sheet does not capture the entry and exit rules but the risk and return objectives. This sheet is essentially divided into two sections, the budget section and the actual section.

Budget section

The budget section has the following columns

Column A – Date:
Record the date that you plan to be trading actively. Days set aside for family vacations and weekends will be excluded from the rows. I usually do the strategy for at least six months. I know of people who do not trade on Mondays and Fridays so these days should be excluded.

Column B – Opening Balance: The first entry in this column is the balance brought forward in the trading account. This amount should be the same for the budget and actual section. The subsequent entries will reflect the opening balances on any particular trading day after adding the expected profits and opening balance from the previous trading day.

Column C - Position: This is the trade size. This is calculated by multiplying the opening balance and the amount of desired leverage. My preferred leverage is 1:30.

Column D – Pip Value: This column shows the value of a single pip based on the trade’s size. For every \$10,000 trading position in the EURUSD, the value of the pip is \$1. So the formula in the entries is dividing the value in the position column with \$10,000.

Column E – Expected Profit: On a daily basis I target at least 30 pips. This is not a target per trade but per day. The expected profit is therefore calculated by multiplying the pip value with the targeted pips.

Column F: Acceptable Loss: I have set myself an acceptable loss of 75 pips per day. Multiplying the 75 pips with the pip value will give the monetary equivalence of the acceptable daily loss.

Column G – Return: This column expresses the expected return as a percentage.

Actual section

This section captures the actual trading results and is adjacent to the budget section to make comparison easier.

Column H – Opening balance: The opening balance in the trading account is captured by this figure.

Column I – Position Size: This is based on the leverage of 30. This however will vary depending on the opportunities presented during the particular day. The best way to fill this is to have an average trading size for the day in the event of multiple trades.

Column J – Profit: A summation of all the trading profits during the day

Column K – Loss: A summation of the trading losses during the day. This figure is always negative.

Column L – Commission: This captures the commissions paid on every trade and the swaps paid or received.

Column M – Deposits/Withdrawals. The additions to the trading account will be positive and withdrawals will be negative.

Column N – Balance: This is obtained by adding the profits, losses, commission deposits and withdrawals to the opening balance.

Column O - Return: This is obtained by dividing the closing balance with the opening balance then less 1. This return will be benchmarked against the expected return and can be negative if the trades in the day resulted in overall loss position. However the deposits and withdrawals will be added back so as to obtain a true representation of the trading performance.

Sheet 2 – Journal

Column A – Date open: The date and time at which the trade was open.

Column B – Date closed: The date and time the trade was closed

Column C – Trade duration: date closed less date open will give us the duration of the trade.

Column D – Currency pair: The currency pair being traded

Column E - Position Size: The size of the trading position. The guideline will be given by the strategy sheet.

Column F – Direction: It can only be long or short. Long for buy trades and short for sell trades.

Column G- Entry price: The entry price of the trade.

Column H – Stop loss: The stop loss price for the trade.

Column I –Take profit: The take profit level for the trade.

Column J – Exit price: The price at which the trade was closed.

Column K- Risk reward ratio: (Take profit – Entry price) divided by (Entry price less stop loss).

Column L – Win/loss: The entry can either be win or loss only. Winning trades are those with a positive return.

Column M – Loss: Must be a negative figure, if the trade resulted in a profit leave this field blank.

Column N – Profit: Profit made on the trade. If the trade resulted in a loss leave this field blank.

Column O- Commission: This captures the commissions paid on every trade and the swaps paid or received.

Column P – Balance – The opening balance from the actual section of the strategy sheet plus the profit less the losses and commissions paid. This balance should correspond with the balance in the strategy sheet.

Column Q – Signal: The trading rule used to enter into the trade.