A method, data processing system, and computer program product for managing a branch trace environment. In response to a branch being taken for a first branch instruction that is conditional and direct in the branch instructions, a performance monitoring unit stores an effective address of the first branch instruction into a first entry in a set of entries in a memory. The performance monitoring unit counts each branch not taken in processing the branch instructions occurring after the first branch instruction to form a branch count. In response to a branch being taken during processing of subsequent branch instructions in the branch instructions after the first branch instruction, the performance monitoring unit determines whether to create a second entry in the set of entries in the memory using the branch count with a set of rules identifying when the second entry is to be made.