Trade Journal: Four Stages and a Net-Profit Calculation

What the journal adds to an exchange receipt

A receipt documents the execution information recorded by the service. It does not know why you selected a quantity, what information you had beforehand or why you changed an instruction. Your journal supplies those dated observations and links them to records that can be checked later.

The CME trade-log lesson discusses recording trades and reviewing observations. The four-stage structure below is a practical editorial template, not a promise of profit. It can support simulated exercises and reviews of actual trades, provided the two are clearly distinguished.

If no reason was written before the trade, state that fact. A later interpretation can still be useful as a later interpretation. Presenting it as the original plan would obscure what the journal is intended to preserve: what was known and decided at the relevant time.

Stage one: prepare the decision record before submission

Record date, time, timezone, asset, pair, product and intended account. Specify whether the exercise is simulated or actual and identify the price source. The description bought bitcoin is incomplete when records mix pairs or confuse a spot purchase with a derivative linked to bitcoin.

Write the task and the information supporting it in terms that can be reviewed. An exercise might test how a limit order handles partial execution rather than make a price prediction. If it does contain a hypothesis, identify what evidence would challenge it. Avoid replacing a testable idea with an unqualified statement that an asset should rise.

Add direction, quantity or budget, order type, limit or trigger fields and time in force. Separate planned trading value from inclusive spending. A stop field is an instruction with particular execution behavior, not guaranteed compensation beyond a maximum loss. Document later changes with their time and reason instead of silently editing the original plan.

Stage two: record execution as it occurred

Save the order identifier, final or current state and unique fills. Include quantities, values, fees and their currencies, plus the active remainder. A price copied from a chart cannot replace the execution record. If a response was lost, note that event and resolve the server-side state before assuming no trade occurred.

In a hypothetical example, two units fill at 100 each. Raw purchase value is 200 and an entry fee of 0.20 is charged in quote currency. Total spending is 200.20 and two asset units are credited, assuming no other deduction. Record those assumptions so a fee charged in the purchased asset does not get analyzed using the wrong formula.

Multiple fills require weighted arithmetic. Preserve their details even if the review card displays one average. Also identify cumulative updates versus individual executions: adding the same already-executed quantity from successive snapshots inflates the result. The average fill guide explains the quantity-weighted calculation.

Stage three: reconcile the exit and net result

Continue the hypothetical trade by selling both units at 105. Gross proceeds are 210 and a quote-currency exit fee of 0.21 leaves 209.79. Subtract the entry spending of 200.20 to obtain net profit of 9.59, under the assumption of no other costs or quantity changes.

A second check starts with the gross price gain: five per unit times two units equals ten. Subtracting fees of 0.20 and 0.21 again gives 9.59. Return on actual initial spending is 9.59 ÷ 200.20 × 100, approximately 4.7902%. Using 200 as the denominator would measure return on raw trade value instead.

For a third-asset fee, retain the original units and a documented conversion if calculating an equivalent value. Do not add incompatible token and cash amounts. A later withdrawal is separate; use the transfer fee calculator and avoid deducting a transport cost twice if an imported report already includes it.

A partial exit is not a completed position

If only one of the two units is sold at 105, the receipt describes that portion. It does not close the whole original holding. Record the remaining unit separately and state the entry-cost allocation method used to calculate the closed portion’s result.

In this simple equal-cost example, inclusive entry cost is 100.10 per unit. Assume the fee on the one-unit sale is 0.105, leaving proceeds of 104.895. The closed portion’s profit is 4.795 under that allocation. The other unit remains held and needs a separate valuation. Its unrealized movement is not another completed sale.

Do not subtract the entire original purchase cost from partial proceeds and label the difference a final realized loss. The unclosed quantity still exists. Keeping cash flows and remaining assets in separate columns makes that error easier to see.

Stage four: review the procedure and outcome separately

First ask whether the submitted pair, amount and order type matched the intention, whether fees were reviewed and whether any change was documented at the time. Then examine the hypothesis and limits of the evidence. Finally assess the financial result. Profit should not erase an input error, and a loss alone does not prove every procedural step was wrong.

Use specific observations such as quantity unit misread or cancellation remainder not checked. A journal entry can simultaneously say procedure followed and outcome negative. That is more actionable than a vague score that mixes operational accuracy with the direction the market happened to move.

Review the whole sample and preserve evidence

Aggregate net results, average gains and losses and the number of each. Do not delete an input error from actual account performance simply because it was outside the ideal method. You can classify it while retaining its effect. Likewise, an order never filled belongs in a decision record, not among profits from assets never acquired.

Keep rule versions and dates if the approach changed. Preserve original receipts separately from shareable redacted notes, and exclude passwords, API keys and recovery words. The Kraken records comparison helps identify the source for trading details versus balance deductions. If a correction is made, retain its date and reason. A reviewable journal makes uncertain points visible instead of filling them with a retrospective story.

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