The advanced journal and the weekly review: turning trades into data

In the beginner course you started a journal. Here we turn it into an analysis tool. A journal does one job: finding out which behaviours make you money and which cost you money, with numbers, not feelings. Without data, memory fools you: you remember the good trades and delete the bad ones.

What to record for every trade

If you're consistent, two minutes per trade is enough. A spreadsheet works perfectly.

The metrics that matter

With at least 30-50 trades you can start calculating:

In a spreadsheet, expectancy is the average of the "R" column; profit factor is the sum of the positive values divided by the absolute value of the sum of the negatives.

MAE and MFE: looking inside the trade

Two more advanced measures that show how price behaves during your trades:

• MAE (maximum adverse excursion): the most it moved against you before you closed.
• MFE (maximum favourable excursion): the most it moved in your favour.

If your winning trades almost always have a small MAE (say never beyond 0.4R), a tighter stop would have cut those losses without touching the winners. If they often reach an MFE of 2R but you close at +1R, you're leaving profit on the table: it's worth reviewing your exits. These are hypotheses to test on a large sample, not to act on after five trades.

Tag your trades to find the flaws

Add tags so you can filter:

• By setup: which has the best expectancy? Which the worst?
• By session/time: do you trade better in the morning or the afternoon?
• By weekday: do Fridays cost you?
• By emotional state: do trades at state 1-2 (tired, agitated) have a different expectancy?
• By rule-following: the gap between "in-plan" and "off-plan" trades is usually the clearest information of all.

You'll often find that the system is positive but indiscipline makes it negative. At that point you know the work isn't on the strategy, it's on you.

The weekly review

Once a week, with markets closed, 30-45 minutes:

1. The numbers: trades, total R, expectancy, drawdown, how many times you followed your rules.
2. The best trade and the worst: why? Was the worst one off-plan?
3. Recurring mistakes: is there a behaviour that keeps repeating (moving the stop, entering late, trading after a stop)?
4. One thing to improve next week: just one, concrete and measurable.
5. One thing you did well, to repeat.

One improvement at a time: people who try to change ten habits at once usually change none.

The monthly review

Once a month, look at the numbers on a larger sample: expectancy by setup, drawdown, rule-following, how you did against your limits. Then decide: confirm, cut risk, stop a setup that isn't working, or increase gradually only if the data and your behaviour justify it.

Sample size matters

A month of data is a few dozen trades: too few to conclude that a setup "doesn't work". It only becomes a signal if the difference is very marked. Change the rules only with enough numbers, or for clear execution errors.

In short

• A journal exists to find, with numbers, what makes you money and what costs you money.
• Record setup, risk, R, rule-following, emotional state and a screenshot.
• Calculate expectancy, profit factor and drawdown; MAE/MFE show how price behaves in your trades.
• Do a weekly review with one thing to improve; the monthly one looks at bigger samples.

Practice

1. Create the sheet with the fields in the table and fill it in for your next 20 trades.
2. Work out expectancy, profit factor and maximum drawdown for your first 30 trades.
3. Do your first weekly review following the five points, and pick ONE thing to improve.