What is a cryptocurrency trading journal and how does it work?
A cryptocurrency trading journal contains the record of all your trading activities and the reasons behind them. It helps you track and analyze your own trading activity.
Just like you follow a particular crypto, your activity must be followed: position taken, profit, loss, etc.
A well-kept journal helps you improve your skills as a trader or investor by analyzing your successes and failures. All successful serious traders keep a trading journal.
The trading journal not only records your actions, but also contains your trading plan and your intentions and your Goals. Even your trading strategy ideas should be written down in your journal.
Why is a crypto trading journal important?
The purpose of the crypto trading journal is to prevent you from repeating the same mistakes that cause you to lose money. The idea is that in the event of a loss or when a strategy does not work, you stop trading in order to review what you have done and see where the shoe pinches.
This approach is more constructive than constantly switching from one strategy to another without analyzing your trading activity.
It’s like an airplane that had complications in flight. The airline doesn’t just throw it away to buy a new one. But she analyzes what happened to repair the failure. And this is possible thanks to the aircraft’s trading log, which is its black box.
You can always write a list of rules in your trading journal.
⚠️ Do we still have to apply them
The key is consistency and discipline 👉🧠#trading #Tradingdiscipline #tradingeducation #crypto #BTC #mindset #mental #leaders #tradingplan pic.twitter.com/ilPhIRrwlW
— Christelle Montillet (@lyricsdecoach) September 15, 2022
1 — The crypto trading journal is used to create trading strategies
Details of your market intentions and approaches should be written on your trading journal. This saves you from buying and selling tokens randomly without planning anything.
2 — The trading journal contains your trading activities
You should take detailed notes, carefully documenting your trades, profit and loss targets, etc. We will see the list at the end.
Read also Understand the “Fork” in just 3 minutes
This detailed information can be used to create a solid framework for your trading strategy.
3 — Trading journal to control your emotions
In general, traders have to work a lot on their psychological state. Your emotions will be influenced by various market circumstances. However, keeping a trading journal will help you organize your thoughts and understand the emotional factors that influence each trade.
By writing a plan that you follow, you are less likely to have regrets or act impulsively. You’re just following the plan. If it does not go well, we analyze afterwards.
Things to put in your trading journal
It’s time to list what should be in a trading journal. The latter can be kept in a notebook or an old-fashioned diary or online in a spreadsheet like Excel or Google Sheets. The advantage of the latter is that you will have access to it by mobile.
Here are some essentials to note in your black box!
- The time and date of any action
- Trade Execution and Order Types
- Crypto or traded pair (e.g. BTC/USD, DOGE/USD, etc.)
- Transaction duration
- Position size
- Distance and amount of take profit and stop loss
- Exit point and reason
- Entry point and reason
- Trade results (profits or losses)
- risk return ratio for each transaction
- Your trading goals
- Advantages and disadvantages of each strategy
- Mistakes made and their causes (such as not following the plan)
- Any other element that can help analyze your trading activity.
Which crypto trading journal platform used?
A spreadsheet allows you to have a tailor-made journal, but there are solutions to help you.