While it might seem intuitive to focus your journal entries on losing trades, as they are often where the most learning happens, this approach misses a critical aspect of trading development. Both winning and losing trades should be documented in your trading journal. In fact, journaling only your losing trades can result in an imbalanced understanding of your trading habits and limit your growth potential.

Why You Should Journal Both Winning and Losing Trades

1. Learn from Successes, Not Just Failures

Many traders make the mistake of only journaling their losses, assuming that the wins don’t require analysis. However, winning trades offer just as much value as losing trades — if not more.

• Why did the trade go well? Did you follow your plan to the letter, or was there an element of luck involved?
• What emotions were present during the trade? Were you calm and following your strategy, or did greed or overconfidence influence your decisions?
• What can you replicate in future trades? Understanding what worked can help you reinforce good habits and continue to succeed.

By focusing only on losing trades, you overlook the positive reinforcement that comes from understanding why you succeeded. It’s important to recognize what triggered your wins so you can repeat the process in future trades.

2. Assess Your Strategy Objectively

A trading strategy is built on rules and patterns that you need to follow consistently. By journaling both winning and losing trades, you can assess whether:

• Your strategy works under all market conditions, not just the ones that fit your bias or intuition.
• You are following the strategy as intended, or if emotions or external factors are swaying your decisions.

For example, if you have a winning streak but are straying from your strategy by making impulsive trades, you might think your strategy is successful when it was simply luck. Conversely, consistently following your rules, even in losing trades, helps you stick to your proven plan.

3. Emotional Awareness

Both wins and losses trigger emotions, and emotional awareness is critical for long-term success in trading. By journaling both:

• Losing trades help you identify emotional missteps, such as fear, panic, or overconfidence, that led to mistakes.
• Winning trades give you insight into positive emotions such as confidence or clarity, helping you understand what kept you disciplined.

Understanding your emotional state in both winning and losing trades is key to emotional regulation. It helps you manage psychological pitfalls such as greed, fear, and overconfidence, which can cloud your judgment.

4. Identify Trends Over Time

Journaling both types of trades helps you recognize patterns and trends in your performance. By tracking both wins and losses over time, you can spot:

• Recurring mistakes: Perhaps you frequently exit winning trades too early, or fail to follow your risk management rules, even on winning trades.
• Successful trade habits: You may notice certain habits or strategies that lead to success, such as staying patient, sticking to your plan, or trading only at specific times.

By documenting your winning trades, you can refine your approach and repeat successful behaviours. Focusing on losses alone may lead you to fixate on mistakes without learning from what actually works.

What Should Be Documented in Your Journal?

For both winning and losing trades, it’s important to document key aspects of each trade. This includes:

1. Trade Details

• Entry and exit points: Where did you enter the trade, and where did you exit? Were your entries and exits based on your strategy?
• Position size and risk management: Did you stick to your risk management rules, such as setting stop-loss orders and adhering to a risk-to-reward ratio?

2. Emotional State

• Before the trade: How did you feel? Were you anxious, overconfident, or calm? Did you rush to make the trade, or did you follow your plan?
• During the trade: How were you managing your emotions while the trade was open? Were you tempted to close early or over-leverage your position?
• After the trade: How did you feel about the outcome? Were you satisfied with the process, or did you feel disappointed or overly euphoric?

3. What Worked and What Didn’t

• For winning trades: Why did it go well? Did you stick to your strategy? Was there an aspect of the market that worked in your favour?
• For losing trades: What could have been done differently? Did you stick to your plan, or did emotions play a role? Did external factors (e.g., news events) influence the outcome?

4. Overall Reflection

• After documenting your emotions and trade outcomes, take a moment to reflect on overall performance:
  • Were you consistent with your strategy?
  • Did you manage risk effectively?
  • What lessons can you take forward to the next trade?

How to Balance Journaling for Both Winning and Losing Trades

If you’re concerned about the time commitment or volume of journaling, here’s how to balance it effectively:

1. Keep It Concise

You don’t need to write long paragraphs for every trade. Focus on key takeaways from both wins and losses:

• One or two sentences about why the trade worked or didn’t work.
• A couple of thoughts on your emotional state during the trade.
• A brief reflection on any lessons learned.

This will help you keep your journaling manageable while still gaining valuable insights.

2. Review Regularly

Instead of journaling just after each trade, consider reviewing your journal entries weekly or bi-weekly. This allows you to see patterns in both winning and losing trades over time and helps you make adjustments based on long-term trends rather than individual events.

3. Use Tools or Apps

Consider using trading journal apps or spreadsheets to streamline the process. Many apps allow you to quickly log trades and add simple reflections, keeping your journal organised and easy to review.

Conclusion

Journaling only your losing trades limits your potential for growth as a trader. Both winning and losing trades provide valuable insights into your strategy, decision-making, emotional state, and overall performance. By journaling both types of trades, you gain a clearer understanding of what works, what doesn’t, and how you can continue to improve your trading skills.

Maximise your trading growth by journaling every trade — whether you win or lose — and learn how to optimise your strategy, emotional control, and decision-making with our Trading Courses.