Module 14: The Trading Journal

A trading journal is the single most important tool for continuous improvement. Most traders don't fail because they lack strategy—they fail because they never track, review, or refine their execution.[^41]

What to Record for Every Trade

Field	Description
Date and time	When the trade was opened and closed
Instrument	What you traded (EUR/USD, AAPL, etc.)
Direction	Long or Short
Strategy/Setup	Which setup from your plan triggered the trade
Entry price	Your exact entry
Stop-loss	Where your stop was placed
Take-profit	Where your target was placed
Exit price	Your actual exit (may differ from TP/SL)
Position size	How many lots/shares/units
Risk-to-reward (planned)	The RRR when you entered
Risk-to-reward (actual)	The actual RRR achieved
P&L	Dollar amount won or lost
Screenshot	Chart screenshot of the setup and entry[^42][^32]

Emotional and Behavioral Tracking

In addition to trade data, record:[^42][^41]

• Emotional state before the trade: Calm? Anxious? Impulsive? Frustrated?
• Did you follow your plan? Yes/No. If no, what did you deviate from?
• Reason for entry: Why exactly did you take this trade?
• Reason for exit: Planned TP/SL, or did you close early/late?
• Lessons learned: What did this trade teach you?

Weekly/Monthly Review Process

Set aside time weekly to review your journal:[^41]

1. Calculate your win rate, average RRR, profit factor, and expectancy for the period.
2. Identify your best-performing setups and your worst.
3. Look for behavioral patterns: Do you lose more on Mondays? After 2 PM? After consecutive wins?
4. Check rule adherence: How many trades broke your plan?
5. Make one specific improvement for the coming week.

Essential Metrics to Track Over Time

• Win Rate: Percentage of winning trades.[^41]
• Average Win / Average Loss: Should show winners significantly larger than losers.
• Profit Factor: Gross profit / Gross loss. Target > 1.5.
• Maximum Drawdown: Largest percentage decline from peak.
• Expectancy per trade: Average dollar amount you expect to make per trade.[^42]

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Module 12.5: The Pattern Day Trader (PDT) Rule

If you trade US stocks with a margin account, you must understand the PDT rule before you start.

What Is the PDT Rule?

The SEC and FINRA classify you as a Pattern Day Trader if you execute 4 or more day trades within 5 business days in a margin account. Once flagged, you must maintain a minimum equity of $25,000 in your margin account at all times.[^43][^44]

If your account falls below $25,000, you cannot day trade until the balance is restored.[^44]

How to Work Around the PDT Rule

1. Fund your account above $25,000 to eliminate the restriction entirely.
2. Use a cash account instead of a margin account—the PDT rule only applies to margin accounts. Limitation: you can only trade with settled cash (T+1 for stocks).[^43]
3. Open multiple brokerage accounts—spread your day trades across different brokers.[^43]
4. Trade forex or futures—the PDT rule applies only to stocks and options in margin accounts.[^45]
5. Keep strict count of your trades—if limited to 3 day trades per 5-day period, make them count.[^45]

Important 2026 Update

FINRA has proposed revisions to the PDT rule that would eliminate the $25,000 minimum and the strict 4-trade classification in favor of risk-based intraday margin requirements. However, this requires final SEC approval and is not yet in effect as of early 2026.[^46]

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