What Is a Crypto Trading Journal and Why Do You Need It?

What Is a Crypto Trading Journal and Why Do You Need It?

Beginner traders 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 journal isn’t glamorous; it’s not even that popular among traders. However, it is an essential 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’ll also share some templates you can use.

What Is a Crypto Trading Journal?

A crypto trading journal is a record that includes the details of all the trades you execute and the motivations behind them. They help you keep track of your trade analysis and performance.

A well-kept journal assists you in developing your trading skills in the financial market while also making you accountable for your wins and losses. They are not only valuable for the crypto market; every trader who is involved in the financial market (forex, 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 executed 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.

Meticulously recording your trades, calculations, and moves during a trade will help you have detailed notes. You can use the detailed notes to form a robust framework for your trading strategy. This framework can determine your trade success and help you avoid making inconsistent moves.

It Helps Manage Your Emotions

Traders usually have a lot of work to do on 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 every 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 Notes Your Strengths and Shortcomings

Since you would 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 to be more accountable for your errors, considering you will be able to know the decisions that lead to the best trading results and the ones that might 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 can be to increase your win rate, reduce your average risk per trade, let every trade run to the end no matter the market conditions, or even lower the rate at which you make mistakes.

Elements of an Effective Trading Journal

It is time to see the important things to include in a trading journal. Your trading journal can be in a book or diary; it could also be online in a spreadsheet like Google Sheets and Microsoft Excel or a Word document. You will have to create your trading journal with information relevant to your style. Some keys components you can include are as follows:

  • Date and time
  • Trade execution and order type
  • Trading Instrument (e.g., BTCUSD, LTCUSD, etc.)
  • Timeframe/length of trade
  • Position Size/trade size and capital limit
  • Long or short position
  • Entry point
  • Stop loss and profit targets
  • Exit point
  • The logic for entering and exiting trades
  • Trade outcomes (Profit or loss)
  • Ratio examination from profits

You can also add some parameters for performance checks or a comment section to write down important information. The information can include:

  • Your trading goals
  • Trading philosophies
  • Strengths and weaknesses in each trade
  • Your thoughts on trades
  • Aspects that need adjustment or reinforcement

You can also add screenshots of your trade setups and other important information. The main thing to note is that your journal should fit your trading style and cover important information for improving your trades.

3 Crypto Trading Journal Templates

If you are not comfortable creating a trading 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 portfolio manager and cryptocurrency trading journal packed with a fair number of practical and appealing features. The system prompts you to upload your trades manually when you create a journal. You can also use the CMM API manager to link your account to your exchange and your CMM account. This way, the journaling process becomes automated as 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 at $69.99 and $89.99 monthly to access more features. As much as CMM is a great tool, it locks its 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 like a performance evaluator, detailed reports, and a section for notes and analysis, among others.

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 you can use for your trades. It also has sharing features allowing you to share your trade records with friends and community members. The other features that come with it include trade notes, risk analysis, auto-import functionality, automated price charts, etc.

You can use the services for free, but you won’t have access to services like analytics and charting features and will also have certain restrictions. You can subscribe to its silver ($29 monthly) or Gold plan ($49 monthly) to enjoy more benefits.

A Step To Being a Disciplined Trader

You need to examine each performance progression and not a single trade to succeed. A trading journal will help you hasten your journey to being a disciplined and more consistent trader.

You can monitor and scrutinize your trading process with an effective trading journal. Keeping one can go a long way in making you the trader you wish to be.

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