Carefully! Lots of text.

Trading journals can be very helpful and also play a major role in the trading plans of most professional traders. Things like planning your futures trades, documenting your current positions, and recording any emotions that arise can be crucial factors in developing a profitable trading strategy.

Understanding how to create and use a trading journal is critical to the success of any trader. Without it, a trader can easily lose control of winning and losing positions. Or (even worse) reset your account.


What is a trade journal?

A trading journal is a document in which all the actions of a trader are recorded, such as strategy development, risk management, psychology, etc. Keeping a trading journal is really easy. And if used correctly from the very beginning, it will quickly prove its effectiveness. In addition to containing valuable information to prevent loss of funds, the journal can help you achieve what is called the “native moon”.

At a minimum, the following speaks in favor of a trade journal:

  • You get reporting.

  • You become more disciplined and consistent.

  • You can determine profitable trading strategies.

  • You know your strengths and weaknesses.

  • You analyze potential deals more carefully.

Successful traders carefully plan all of their trades and document the successes and failures of their trading activities. By creating a trading journal and using it correctly, you can become a successful trader regardless of market movements.


How to Create a Trade Journal

You can find a free trading journal template in the next section, but still learn how to create one yourself. Customize the magazine in one format or another to suit your trading style and needs. Once you have this valuable resource for planning and documenting your trading activity, you will truly be ready to trade.

First, for your trading journal, you'll need to create a spreadsheet (e.g., Google Sheets, Microsoft Excel) and a word document (e.g., Google Docs, Microsoft Word). They are needed to record the exact trades and your thoughts accordingly. You can insert a text document as the second sheet of the table if it is more convenient for you (see template below).

Second, you need to know what you need to write down each day to make sure your trading journal is as useful as possible. Examples of trade magazines can be found on the Internet. But regardless of the template, your spreadsheet should have columns with parameters for each deal. These columns may include:

  • Date of entry

  • release date

  • Trading pair

  • Duration (long/short)

  • Entrance fee

  • Size items

  • nominal cost

  • Stop loss

  • Take profit

  • Exit price

  • Trading commissions

  • Profit/Loss (P&L)

  • Profit/Loss Ratio (P&L%)

  • Notes:

Some traders add time frames, screenshots of market conditions, and anything else they consider important. The main thing is that the information is useful.

In a word document (or another tab), you should have a section for each day where you can write down all your thoughts and ideas and then organize them.

A text document is a place for a trader’s free creativity, while a table helps to measure the profitability of his activities. Both formats are extremely useful when creating and using a trading journal.

That's all! However, creating a trade magazine is not a difficult task. The main thing is to learn how to use it. If you have a clear understanding of the basics, you'll be using your trading journal like a pro in no time.


Trade magazine template

Good news! Binance Academy has prepared a simple yet effective trading journal template for you. All you need to start using it right now is click File and Copy!

➟Binance Academy Trading Journal Template (Free!)

Note that in this example, we are using the second tab of the table as the text document, as discussed above. To track your decision-making process and trade results, you can write all your thoughts and comments there.


How to Use a Trading Journal

It's one thing to create a trading journal, but it's another thing to know how to apply the information you learn to your trading. A trader who effectively uses a trading journal will begin to profit from trades faster.

You must have a serious reason to open any trade. This is where a text document comes in handy.

Every day, when analyzing the market, you will be overwhelmed with ideas and a wide variety of feelings. You need to write them down, noting anything that could help or hinder your trading activities. Such information includes market behavior, past transactions, current and potential transactions.

In the text document, you will also argue whether your particular trading idea is a good idea. Your trading ideas should be analyzed and critiqued so that you can determine the strengths and weaknesses of each one.

When your feelings and sensations are written down, it will be the turn of the table.

A spreadsheet is not a creative space (unlike a text document), but a logical one. This is where you will record all your transactions. It is extremely important that you write them down carefully and in a timely manner.

A factor in successfully maintaining a trading journal is also accurately measuring successes and failures. In the table, you should keep detailed records, assessing how justified the ideas presented in the text document are.

A good habit is to write down trades immediately after they are executed. They will be fresh in your mind and you will save time in the future.

Another good habit is to look at your trading journal spreadsheet every day. This way, you can get a bird's eye view of your portfolio of trades, get an idea of ​​how effective you are, and whether you have the resources to enter other trades.


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Summary

It doesn't matter if you are a swing trader or a day trader. Achieving success can be very difficult. Without carefully planning and documenting your trading activities, you will find yourself moving around the market aimlessly. And it rarely ends well.

By learning how to create and use a trading journal to your advantage, you can more effectively identify market patterns and trends. Taking detailed notes to record your ideas, emotions, and trades requires little effort but can be very rewarding.