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.

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

Emotional and Behavioral Tracking

In addition to trade data, record:

• 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:

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.
• 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.

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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.

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

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).
3. Open multiple brokerage accounts—spread your day trades across different brokers.
4. Trade forex or futures—the PDT rule applies only to stocks and options in margin accounts.
5. Keep strict count of your trades—if limited to 3 day trades per 5-day period, make them count.

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.

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