Beginners tend to find crypto trading overwhelming and are prone to making mistakes. Unfortunately, they don’t learn from these mistakes early enough since they usually don’t keep a trading journal. A trading diary is not glamorous; it is not even that popular among traders. However, it is an important tool that can help you make good progress in your trading activities.
So let’s examine why you need a trading journal and its elements. We also share some templates you can use.
What is a Crypto Trading Journal?
A crypto trading diary is a record that includes the details of all the trades you make and the motivation behind them. They help you keep track of your trading analysis and performance.
A well-kept journal helps you develop your trading skills in the financial market, while keeping you accountable for your gains and losses. They are not only valuable to the crypto market; every trader involved in the financial market (currency, stocks, etc.) needs them.
Why do you need a Crypto Trading Journal?
With a trading journal, you can monitor and improve your trading strategy. Looking back at the trades you made will allow you to know what to stop or improve. Let’s elaborate on how these work under the following subheadings:
It helps you build a framework for your strategies.
Careful recording of trades, calculations and movements during a trade will help you with detailed notes. You can use the detailed notes to form a robust framework for your trading strategy. This framework can determine your trading success and help you avoid making inconsistent moves.
It helps to deal with your emotions
Traders usually have a lot of work to do with their psychological state. Different market situations will affect your emotions. However, a trading journal will help you organize your thoughts and understand the emotional triggers behind each trade.
When you master the strategies that work through journaling, you can make better trading decisions with proven strategies and not from emotion. In addition, a consistent strategy will help you stay focused in different market situations.
It notices your strengths and weaknesses
Since you will be able to see the trigger behind every trade you take, you can use the information to correct yourself and reinforce better trading decisions.
Keeping a journal will also help you be more accountable for your mistakes, considering that you will be able to know the decisions that lead to the best trading results and those that may need some adjustments. Doing this will help you optimize your trading strategy and incorporate adjustments into your strategies.
It helps you set up a growth plan
By measuring some critical aspects of your trades, you can set goals for yourself to get better results. The goals could be to increase your win rate, reduce the average risk per trade, allow each trade to run to the end regardless of market conditions, or even decrease the rate at which you make mistakes.
Elements of an effective trading journal
It’s time to see the important things to include in a trading journal. Your trading journal can be in a book or diary; it can also be online in a spreadsheet like Google Sheets and Microsoft Excel or a Word document. You need to create your trading journal with information relevant to your style. Some key components you can include are as follows:
- Date and time
- Trade execution and order type
- Trading instrument (e.g. BTCUSD, LTCUSD, etc.)
- Time frame/length of trade
- Position Size/trade size and capital limit
- Long or short position
- Entry point
- Stop loss and profit targets
- Base
- The logic for entering and exiting trades
- Trading outcome (profit or loss)
- Ratio analysis from surplus
You can also add some parameters for performance checks or a comment section to write down important information. The information may include:
- Your trading goals
- Trading philosophies
- Strengths and weaknesses of each trade
- Your thoughts on shopping
- Aspects that need adjustment or strengthening
You can also add screenshots of your trade setups and other important information. The most important thing to note is that your journal should suit your trading style and cover important information to improve your trades.
3 Crypto Trading Journal Templates
If you’re not comfortable creating a trade journal from scratch, you can use some ready-made journals to make it easy to record your trades. Let’s quickly look at three platforms that offer journaling services.
1. Coin market manager
Coin Market Manager (CMM) is a cryptocurrency portfolio manager and trading journal packed with a large number of practical and appealing features. The system asks you to upload the trades manually when you create a journal. You can also use the CMM API Manager to connect your account to the exchange and your CMM account. In this way, the record keeping process is automated as the CMM will automatically categorize your opened and closed trades.
Coin Market Manager services come in different packages. You can use the service for free or subscribe to the Professional or Enterprise plan for $69.99 and $89.99 per month to access more features. As much as CMM is a great tool, it locks the best features behind the subscriptions.
2. TraderSync
TraderSync is another platform designed to record and track your trades. You can record your trades manually or by importing a .CSV file. The platform is user-friendly and has features such as a performance evaluator, detailed reports and a section for notes and analyses, among other things.
TraderSync services come in three packages: Pro, Premium, and Elite, priced at $29.95, $49.95, and $79.95 monthly, respectively.
3. Traders Vue
TradersVue has excellent features and analytical tools that you can use for your trades. It also has sharing features that allow you to share your trade records with friends and community members. The other features included include trade slips, risk analysis, automatic import functionality, automated price charts, etc.
You can use the Services for free, but you will not have access to services such as analytics and mapping features, and you will also have certain limitations. You can subscribe to Silver ($29 monthly) or Gold plan ($49 monthly) to get more benefits.
A step to being a disciplined trader
You need to examine each performance progression and not a single trade to be successful. A trading journal will help you speed up your journey to becoming a disciplined and more consistent trader.
You can monitor and audit your trading process with an efficient trading journal. Keeping one can go a long way in making you the trader you want to be.
