Trading on the exchange requires deep analysis, financial discipline, and careful planning. Successful trading is not a matter of luck or good intuition. One unsuccessful trade can derail a trader for a long time, so everyone strives to avoid this. That is why the trading journal is one of the most important tools for achieving stable profits. Regardless of experience level in cryptocurrency trading, keeping records can significantly increase profits.

What is a trading journal?

A trading journal is a tool for conducting analytics on trading operations and managing risks. It consists of systematized records of all trading operations. This can be a simple table in Microsoft Excel or a table in a specialized tool, which we will discuss a bit later.

The main goal of the trading journal is to provide the trader with analytics of actions and help make the right decisions.

Key elements of the journal

Each trading journal should contain certain key elements:

  1. Asset type: It is important to indicate in which currency the transaction was made. For example, BTC, ETH, USDT, etc.

  2. Date and time of the transaction: This will allow tracking the history and volume of trades over a specific period.

  3. Type of transaction: A purchase or sale operation was carried out.

  4. Entry price: Will be needed later to calculate net profit.

  5. Stop-loss and take-profit: Defined levels at which the transaction will be closed.

  6. Transaction result: Records of the profit or loss obtained will allow analyzing the number of successful trades in the future.

  7. Strategy description: A brief note on the approach used will allow understanding its effectiveness in trading. With information about your trading strategy, it can be reviewed and improved.

  8. Notes on psychological state: Additional records that will help understand how the emotional background affects your ability to make successful trading decisions.

The number of elements in the journal can vary depending on your needs — type of assets, position size, and trading volume.

4 reasons to keep a trade journal

So why is it so important to keep a trading journal? Here are 4 main reasons:

  1. Control in decision-making. Many trades are lost due to emotions: anger, fear, and excitement. In trading psychology, there is a concept of FOMO (fear of missing out) — the fear of a missed opportunity, especially a missed profitable trade. Making decisions under the influence of emotions is a common mistake for both beginners and more experienced traders. Very often, eager traders try to copy the actions of others, risking their capital, which does not always lead to success. Regularly keeping records of their trades gives a real opportunity to control risks and plan transactions. This will help avoid impulsive decisions and work on improving self-discipline.

  2. Learning from mistakes. Sometimes one has to learn from their own mistakes and experiences. A trading journal allows understanding the reasons for successes and failures. By recording each trade, you will begin to understand what you most often do wrong.

  3. Continuous development. Monitoring trading results allows making changes and adjusting future actions. Constantly adapting the strategy ensures capital growth. This is especially important for the dynamic cryptocurrency market.

  4. The habit of planning and discipline. Keeping a trading journal regularly helps develop the habit of planning. Trading on the exchange requires a disciplined approach and well-thought-out actions. By systematically recording trades, traders will gradually make more measured decisions over time.

Common mistakes when keeping a journal

Mistakes in maintaining a trading journal are undoubtedly made by most, but most often by beginners. Let's look at common mistakes to avoid them in your activities.

The first mistake is insufficiently detailed records. It is important to understand: the more moments are recorded, the easier it is to analyze the results. Each element of the trading journal contains a set of essential data needed for a clear understanding of subsequent actions. The absence of important information significantly reduces the effectiveness of this tool.

One should not ignore the psychological aspects: mood, emotional state, etc. As is known, our feelings affect trading. Control over one’s emotions gives a significant advantage over traders prone to impulsive decisions.

Another problem is inconsistency in maintaining the journal. If not all trades are recorded, but only some, it is impossible to conduct thorough analysis or develop an effective trading strategy. Sporadic and irregular records cannot provide a complete picture.

The most common mistake is recording without analysis. Simply recording data is not enough; it is necessary to periodically review and analyze previous trades, drawing conclusions about the effectiveness of strategies.

The best journal templates and applications

There are many templates for keeping trading journals, both free and paid.

Let's first look at free templates:

  • Trade Tracker Journal (in Notion). A simple and convenient template that allows recording entry/exit prices, position sizes, and calculating profits/losses. Automatic calculation of P&L and basic charts are also available, making this tool useful for beginner traders.

  • Journal from StockBrokers (in Excel). A classic option for those who love to work in spreadsheets. It is simple and suitable for all types of trading. With this tool, one can calculate profits/losses and assess risks.

  • 40 templates from Template Archive (in Excel). A collection of classic templates of various types, where one can choose the most suitable option for themselves.

There are also popular paid templates for trading journals:

  • Ultimate Trading Journal Template (in Notion). This tool is suitable for trading both cryptocurrencies and stocks. The journal template allows recording detailed data and results of trades, as well as helping to develop strategies that will help maximize profits.

  • Advanced Trade Journal Template (in Notion). A journal template with fully automated dashboards that provide real-time statistics. The tool allows analyzing trades by key indicators and optimizing one’s strategy.

Trading journals also exist in the form of various applications and services:

  • Edgewonk (paid) — a popular trading journal designed for trading Forex, stocks, futures, cryptocurrencies, and contracts for difference (CFD). The tool provides traders with weekly and monthly reports, helping to analyze mistakes and adapt trading strategies.

  • TraderZella (paid) — an application for beginner traders with a simple interface. The journal provides detailed trade analytics, including real-time analysis, tracking entries and exits, maintaining P&L, and helps identify weaknesses in the strategy and the likelihood of a profitable trade.

  • TraderSync (paid) — an application that records trades automatically. It is a universal tool suitable for different types of trading. The journal allows adding screenshots and notes to each trade, which will be useful for analyzing strategies.

  • Trader Make Money (paid) — an automated journal for cryptocurrency trading. Works with Binance and Bybit exchanges. The service syncs in real time and can be personalized according to your style.