What is the purpose of a trade journal?

The purpose of a trade journal is to record and review your trades so you can understand your performance, identify mistakes, and improve your trading decisions. A personal trading journal keeps details such as the entry price, exit price, position size, profit or loss, setup, and reason for taking the trade in one place.

Over time, this information gives you a much clearer view of how you actually trade. You can check your win rate, average R-multiple, profitable setups, losing setups, and common mistakes. You can also compare your results across different markets, timeframes, and strategies.

A trade journal can also refer to an industry publication that covers news, trends, products, and professional opinions within a particular field. In trading, however, the term usually refers to a personal record of trading activity.