Trading · Medium · 13 min lesson
Trading practitioner: journalling, review metrics and a demo practical
Trading Academy L2, chapter T2.2. Educational only, not investment advice. MetaTrader 5 testing report metrics; ESMA retail CFD loss statistic (2018); demo accounts only
What you will learn
- Keep a complete, timely journal that reconciles to the platform history and is net of costs.
- Calculate and interpret results in R, expectancy, profit factor, maximal drawdown and recovery factor.
- Run a demo practical against criteria fixed in advance and report its limits honestly.
Key takeaways
- A journal entry holds the plan tag, entry, stop, risk, size, exit, net result in R and money, and whether the plan was followed.
- Records are made at the time and never rewritten; corrections are new dated lines, and totals reconcile to the platform History.
- Core metrics: expectancy in R, profit factor, maximal drawdown and recovery factor, always computed on net results after costs.
- Small samples mislead; judge a setup over 30 to 50 trades, change one rule at a time, and keep a dated change log.
- A demo practical fixes its criteria before trade 1 and reports limits honestly; a demo pass is not advice to trade live. Education only.
Free practice question
A journal line for trade 22 reads: 'Bought EURUSD, won, good.' The student wants to calculate expectancy and drawdown from the journal.
Which fields are missing that prevent any review metric?
Planned risk, stop, size, exit reason, net result in R, and whether the plan was followed.
Correct. Journal fields section: R cannot be computed without planned risk, and adherence needs the plan followed flag.
The name of the broker's head office.
Not quite. The journal fields section lists trade data, not provider details, so this adds nothing to the metrics.
A prediction of next week's market.
Not quite. Predictions are not journal fields in the fields section and do not enable any metric.
Nothing: win or lose is enough.
Not quite. Win or lose cannot give expectancy or drawdown; the journal fields section requires numbers.
Key terms
- profit factor: Gross profit divided by gross loss; 1 is break even (MetaTrader 5 testing report).
- maximal drawdown: The largest drop from a local high of the balance to the next low (MetaTrader 5 testing report).
- recovery factor: Net profit divided by maximal drawdown, a measure of how much risk was taken to earn the profit.
- expectancy: Average result per trade, in R or money, after costs.
- R multiple: Net result divided by the planned risk on the trade.
- plan adherence: The share of trades that followed every written rule of the plan.
- reconciliation: Checking that journal totals equal the platform History totals line by line.
- demo account: A practice account with virtual money; it cannot reproduce live fear or all execution conditions.
Official sources
- ESMA, 27 March 2018: ESMA agrees to renew and expand restrictions on CFDs (leverage limits, margin close-out, negative balance protection, 74-89% retail loss statistic)
- MetaTrader 5 Help: Trading, general concept (positions, stop loss and take profit)
- MetaTrader 5 Help: Testing report (profit factor, expected payoff, maximal drawdown, recovery factor, Sharpe ratio)
Go further
The full lesson has narrated slides, more scenario questions with explained answers and a simulation.
Open the AcademyWatch on YouTubeEducational content, not financial advice. Trading involves risk of loss.