Short answer
A trading journal is a record of every trade: time, asset, direction, expiry, stake, payout, result and the reason you entered. Its main job is to show whether your win rate beats the break-even rate for your payout. Review it weekly, compare setups separately, and do not judge a method on fewer than about 100 trades.
Why bother
Memory is a poor record. Most people remember a few big wins and the trades that hurt, and forget the dull middle. A journal replaces impressions with numbers. For binary options it answers one question above all: is my win rate above the break-even rate for the payout I get? If you do not know that number, you do not know whether you are trading a method or a habit.
The template
Record one row per trade, entered straight after the trade closes.
| Column | Example | Why it matters |
|---|---|---|
| Date and time | 2026-11-02 14:05 | Shows which hours work and which do not |
| Asset | EUR/USD | Results often differ by asset |
| OTC? | No | OTC and real-market results should be kept apart |
| Setup | EMA pullback | Lets you judge each method separately |
| Direction | Call | Checks for a bias toward one side |
| Expiry | 5 min | Short and long expiries behave differently |
| Stake | $5 | Needed for profit and risk checks |
| Payout | 85% | Sets the break-even rate for that trade |
| Result | Win / Loss / Tie | The core data |
| P/L | +$4.25 | Running total |
| Followed rules? | Yes / No | Separates method problems from discipline problems |
| Note | “Entered late, after the candle” | Context you will forget by next week |
The Followed rules? column is the one most people skip and the one that often explains the most. If your rule-following trades are close to break-even and your off-plan trades lose heavily, the fix is discipline, not a new strategy. The trading psychology guide covers that side.
The metrics
Win rate
Win rate = wins ÷ (wins + losses). Leave ties out, or record them separately.
Break-even rate
Break-even = 1 ÷ (1 + payout). At 85% that is 54.05%; at 80% it is 55.56%. If your payouts vary, calculate it per trade or use the average payout. The break-even calculator does this for you.
Expectancy per trade
Expectancy tells you the average result per unit staked:
Expectancy = (win rate × payout) − (loss rate × 1)
With a $10 stake:
| Win rate | Payout 80% | Payout 85% |
|---|---|---|
| 50% | −$1.00 | −$0.75 |
| 52% | −$0.64 | −$0.38 |
| 55% | −$0.10 | +$0.18 |
| 58% | +$0.44 | +$0.73 |
These are averages, not promises. A positive figure in your journal can still come from luck if the sample is small.
Longest losing streak
Write down the longest run of losses. Compare it with what chance alone would produce using the losing streak calculator. Even at a 55% win rate, a run of 5 losses within 100 trades happens in about 65% of cases. A streak like that is normal and is not, by itself, proof that a method has stopped working.
Sample size
This is the metric beginners ignore. A measured win rate wobbles a lot on small samples. Assuming a true win rate of 55%, the approximate 95% range of what you might measure is:
| Trades | Likely measured range |
|---|---|
| 20 | about 33% to 77% |
| 50 | about 41% to 69% |
| 100 | about 45% to 65% |
| 200 | about 48% to 62% |
| 400 | about 50% to 60% |
Range = 55% ± 1.96 × √(0.55 × 0.45 ÷ n).
So 20 good trades tell you very little. Around 100 trades per setup is a sensible minimum before drawing a conclusion, and even then the range is wide.
How to review
After each session (5 minutes):
- Did I stop at my daily loss limit or trade count?
- Any trades marked “No” for rules? Why?
Once a week (30 minutes):
- Group trades by setup. Calculate win rate and break-even for each.
- Group by hour. Are some hours clearly worse? Check them against the market hours tool.
- Group by asset and by OTC versus real market.
- Compare rule-following trades with off-plan trades.
- Decide one change for next week, and only one, so you can see its effect.
An example weekly summary
A short summary table at the end of each week makes trends visible. The figures below are an invented example to show the layout, not real results:
| Setup | Trades | Win rate | Avg payout | Break-even | Followed rules |
|---|---|---|---|---|---|
| EMA pullback | 42 | 52.4% | 85% | 54.05% | 39 of 42 |
| Level bounce | 18 | 61.1% | 82% | 54.95% | 18 of 18 |
| Off-plan | 9 | 33.3% | 85% | 54.05% | 0 of 9 |
Read it carefully: 18 trades is far too few to trust the 61.1%, while the off-plan row is a discipline issue rather than a strategy issue.
Common mistakes
- Recording only some trades. A journal with gaps is usually missing the losses.
- Changing the method every few days. You never reach a useful sample.
- Mixing demo and real results. Behaviour often changes when real money is at stake; keep separate sheets.
- Judging by profit alone. A profitable week built on one oversized stake hides a risk management problem.
Start on the demo
The easiest place to build the habit is a demo account. Journal at least 100 demo trades with one setup before deciding whether it is worth testing with small real stakes.
FAQ
Should I use a spreadsheet or an app?
A spreadsheet is enough and lets you calculate your own metrics. What matters is recording every trade, not the tool.
Do I need to journal demo trades?
Yes. A demo is only useful as a test if you record it the same way you would record real trades.
How often should I review?
A short check at the end of each session and a fuller review once a week works for most people.
How this page was made: drafted with AI assistance from public sources and our own test logs, then checked and edited by the ExpiryLab editorial team. The date above shows the last check. How we test · Editorial policy