One of the most valuable strategies for performance management as a crypto trader is a trading journal. It's where you keep track of and analyse your daily trades for improved results and future reference. A journal can help you track your progress and learn from your mistakes while entering or exiting trades. Planning futures trades, tracking existing positions, and taking note of any emotions that arise are all significant factors when creating a successful trading strategy.
If you want to become a successful trader based on your performance, trading journals can aid you in getting there faster. A trader could quickly lose track of their winning and losing positions if there's no record to refer to. A trading journal is a document that records everything you do as a trader, including strategy development, risk management, psychology, and other aspects.
Advantages of Keeping a Trading Journal
Traders can create a winning strategy based on their trading experience by using a trading log. The benefits accumulate over time and are beneficial to trade efficiency. Your trading journal will be the key to successful trades if it is updated regularly.
It teaches you to be more responsible, disciplined, and consistent. It also improves your understanding of effective trading techniques. You may also keep track of your accomplishments and shortcomings. Depending on the knowledge you've acquired, you'll be more cautious when analysing possible trades.
You can become a successful trader regardless of market conditions by maintaining a trading journal and utilising it effectively.
Trading Journal Templates
There are various trading journal templates readily available online that you can download for your use. However, it is essential to understand how to build one focused on your preferences and trading style.
You may accomplish this by using Google Sheets, Microsoft Excel, or other Microsoft Word, Google Docs or similar applications to construct your trading journal spreadsheet. You might also keep a handwritten trading journal if you prefer to do things this way, as long as you can quickly access it.
You must understand what you should record daily (or however often you trade), as this information may significantly affect your efficiency. Here are a few of the most typical columns to add to your trading journal:
- Entry Date
- Exit Date
- Ticker (or cryptocurrency name)
- Position Size (i.e. the dollar amount)
- Long/Short (direction - if applicable)
- Entry Price
- Stop Loss (where you exit at a certain price below what you entered to minimise your losses)
- Take Profit (the opposite of a stop loss)
- Exit Price
- Trading Fees (for more on BitPrime's fees please read our Fees and Pricing page)
- Results of the Trade (profit or loss)
You may also create an additional column or area to log your thoughts and feelings or ideas while trading (think of how many people buy or sell due to FOMO - fear of missing out!).
You don't need to use all of the above column examples for all types of crypto buying and selling - some are more useful for day traders on exchanges. Personally, mine is a very simple, handwritten ledger including the entry and exit dates, ticker, position size, entry and exit prices and fees.
Choose to record the information that works best for you!
An effective trader evaluates not just each particular trade but also their trading performance over time. Traders may speed the route to a more disciplined and lucrative trading career by keeping a good trading journal. You can analyse, evaluate, and enhance your trading process by learning how to utilise this tool efficiently. You can maintain detailed records of your expertise, emotional triggers, and other aspects of trading that you would like to improve continually.
Before making any trade, you should jot down your thoughts to see if anything might help or impede your overall trading efficiency. You may look at the prevailing market behaviour, as well as your previous and current trades and your upcoming trades. You may also use your journal to assess if a particular trade idea you're considering is a good one or not.
Finally, make it a practice to record all of your deals as soon as they are completed. You'll save much more time this way than if you try to recall and retrieve all the information after several hours or days of trading.
The above references an opinion and is for informational purposes only. Do not take this as personalised financial advice or investment advice. The views expressed by the author do not necessarily represent the opinion of BitPrime.
Last updated: 07/09/2021
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