Buy Crypto
Markets
Contract
Spot
Earn
Web3 new
Learn
Blogs > Crypto 101 > Why Do Crypto Traders Need Trading Journals? >

Why Do Crypto Traders Need Trading Journals?

Author: Silvia Date: 2024-01-30 08:49:24

  • Facebook
  • Twitter
  • LinkedIn
  • Telegram
  • Discord
  • Youtube
Subscribe Phemex

Get The Latest News And Updates From Phemex!

giftRegister to get $180 Welcome Bonus!
Email
Password
Invitation code (Optional)

Every trader has a system. The way they approach crypto markets defines what opportunities they take and which trades they ignore. In fact, this system is the only difference between careful trading and blind gambling. After a win or during a losing streak, every trader works tirelessly to refine their system.

One of the best ways to achieve this incremental improvement is by using a trading journal. This article explores key questions for understanding how and why journals are important to serious traders.

What is a trading journal?

In short, a trading journal is a record-keeping tool for traders to log their performance.

A trading journal can be maintained in many different formats, including spreadsheets or even handwritten notebooks. But smart traders rely on automated trading journals, especially when operating in fast-paced and volatile markets like crypto.

Every trader styles their journal differently. Some traders include and study every possible data point from every single trade. Other traders monitor a few data points at a time depending on which trading strategy they employ. But in general, the purpose of every trading journal is to provide traders with a systematic way to review and evaluate their trades.

Why is journaling important?

Trading journals are important because they provide a structured way for traders to assess their performance and identify areas for improvement. Markets are noisy and distracting. Crypto trading journals preserve important data that drowns out the chaos and helps a trader focus on developing winning strategies and ignoring losing ones.

Documenting key data from every (or even just most) trades helps traders analyze themselves objectively and gain valuable insights into their own decision-making process. A trading journal serves as a tool for self-improvement and accountability as each trader is encouraged to adhere to their trading plan and predefined rules, as the journal would otherwise expose their errors and related consequences. Long-term success in the financial markets starts with consistent, objective, and honest analysis of trading performance. Journals provide this data.

How are trading journals useful?

Journals are important in lots of ways, but there are two main benefits that demonstrate the usefulness of a journal.

First, journaling is key to achieving consistency. Traders should always remember that trading is a game of speculation. The goal is to become profitable by limiting random results and achieve consistency. Tracking performance data helps with exactly that. The quicker a trader becomes accountable to themselves (and their journal), the faster they will improve. 

Second, journals provide accountability. Instinctively, no one likes to be told they are wrong even once, let alone be reminded of their mistakes on a daily or weekly basis. Yet, that is exactly how traders improve – by reviewing their mistakes through detailed data tracking, and adjusting their execution to avoid repeated errors.

Is journaling a waste of time?

One of the biggest mental barriers for new traders to start journaling is the time commitment. Sometimes veteran traders will post photos of elaborate hand-written trading notes in large notebooks. Other traders show complex custom tracker dashboards built in Excel. But these methods may overrepresent the time commitment needed to properly journal.

In fact, journaling trades can take virtually no time at all. Using an automated trading journal reduces hours and days of journaling into mere seconds. Personal trading data auto-populates dozens of data widgets with just a few clicks and saves time from being wasted on boring manual data entry. That valuable time should be spent finding new opportunities in the market.

In short, every trader needs a journal. And every trader’s journal should be automated


  • Facebook
  • Twitter
  • LinkedIn
  • Telegram
  • Discord
  • Youtube
Subscribe Phemex

Get The Latest News And Updates From Phemex!

giftRegister to get $180 Welcome Bonus!
Email
Password
Invitation code (Optional)
start trading start trading start trading

Register On Phemex Now To Begin Trading

Register On Phemex

More Articles

Subscribe Phemex

Get The Latest News And Updates From Phemex!

Get The Latest News & Updates!

Bonus

Pulse Arrives on TON & Create your own group to get 2000 $PULSE