What is a cryptocurrency trading journal and how does it work?
A cryptocurrency trading journal contains gramophone 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 should 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 yours Goal. 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 shopping 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 a plane 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 breakdown. And it is possible thanks to the aircraft’s trade log, which is its black box.
You can always write a list of rules in your trading journal.
⚠️ Should we still use them
The key is consistency and discipline 👉🧠#trading #Tradediscipline #tradetraining #crypto #BTC #mind set #mental #leaders #tradingplan pic.twitter.com/ilPhIRrwlW
— Christelle Montillet (@lyricsdecoach) 15 September 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 document your trades, profit and loss targets, etc. We will see the list at the end.
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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 need to work a lot on their psychological state. Your emotions will be affected by various market conditions. But 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 regret or act impulsively. You just follow the plan. If it doesn’t go well, we analyze afterwards.
Things to write in your trading journal
It’s time to list what should be in a trade journal. The latter can be kept in a notebook or an old-fashioned diary or online in a spreadsheet such as Excel or Google Sheets. The advantage of the latter is that you can access it via mobile.
Here are some essential things to note in your black box!
- Time and date of any action
- Trade execution and order types
- Crypto or traded pairs (eg BTC/USD, DOGE/USD, etc.)
- The duration of the transaction
- Position size
- Distance and amount of take profit and stop loss
- Starting point and reason
- Entry point and reason
- Trading results (profit or loss)
- risk return ratio for each transaction
- Your trading goals
- Advantages and disadvantages of each strategy
- Mistakes made and their reasons (such as not following the plan)
- Any other element that may help analyze your trading activity.
Which crypto trading journal platform used?
A spreadsheet allows you to have a customized journal, but there are solutions to help you.