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Keeping a market diary next to your trade journal

A trade journal records what you did. A market diary records what the market did, whether you traded or not. Keeping both gives you a much richer record than either alone.

The diary can be short. A few lines per session per pair. What was the overall character of the session, trending, ranging, choppy? Did the London open break the Asian range or fail? What drove the main move, data, a headline, nothing obvious? Where did the session close relative to the day's range?

Over time, this builds a picture of how your pairs behave under different conditions. After a few months you can look back and see, for example, how often EURUSD trended on days with no major data, or how often the first move after the London open reversed by mid morning.

It also makes your trade journal more useful. When you review a trade, you can look up the diary for that day and see the conditions. A losing trade on a choppy day might not reflect a bad setup, just a day that didn't suit the strategy.

The diary is also good for days you don't trade, which leave no trace in a normal journal.

It takes five minutes at the end of the session. I'd keep it simple enough to fill in even when you're tired, or it won't last.

Use the same short categories every day so the diary can be sorted later. Words like trend up, trend down, range, chop and news driven, chosen from a fixed list, are much easier to analyse than free text. You can add a sentence of notes, but the fixed tags are what make the diary searchable. After three months, a simple count of each category per pair gives a solid sense of what kind of market each pair usually offers in your session. Five or six tags is plenty, and a fixed list stops you inventing a new word every day.

Include a note about anything unusual. A holiday in one of the currencies, an unexpected headline, a big option expiry, a broker problem. These explain sessions that don't fit the normal pattern. When you look back later and see an odd day, the note tells you why. Without it, odd days can mislead your analysis, making it look like the strategy failed on a day when the conditions were simply unusual and tell you little about the strategy. A short note column takes care of it, and it only needs filling in on the odd days.

Compare your morning plan with the diary at the end of each week. Did the sessions you expected to trend actually trend? Did the levels you marked get respected? This shows how good your pre session read is, separate from your trading. Some traders find their market reads are quite good and their execution is the weak spot. Others find the opposite. The diary is the tool that separates those two things, since the trade journal mixes them together. A weekly comparison of plan and diary takes about ten minutes and is often the most useful review you can do.

Screenshots help a diary as much as a trade journal. A single end of session screenshot of each pair, with the day's main levels marked, takes seconds and makes the diary much easier to scan later. Flipping through a month of session screenshots, in order, gives a quick visual sense of how the market changed over that time. It's a surprisingly good way to notice shifts in volatility or behaviour that are easy to miss day by day. A folder per month, named by date, is enough to keep them in order.

A market diary is worth the extra few minutes. Including one line about spreads at the London open is useful too, especially on days with unusual conditions such as bank holidays in the UK or US. Over time the diary shows which days of the week and which conditions produce the cleanest London breaks of the Asian range. That helps the trade journal later, since bad results on days the diary marked as choppy are less worrying than bad results on days that looked clean.