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Trading is an endeavour undertaken by many, be it as a profession or simply as an investment option for the amelioration of their financial situation. Different traders have different methods of trading with some investing in long term stocks while others filling their portfolio with short-term trades over a few days. Regardless of your trading style, one thing is essential for all traders: keeping track of your trading activities. Be it for simply keeping track of your money or to be used as a reference for future learning, records of your trades are a must-have. As such, tools have been developed in order to aid the trader in their work. One such solution is the trading journal.
What is a Trading Journal?
A trading journal is basically any kind of record-keeping mechanism where you track your progress as a trader or investor. Each trade you perform can be recorded with notes on the performed trading activities and how it individually affected one’s portfolio. The best trading journal will help you learn and grow as a trader, ensuring that your future trades are better informed and a good fit for your current situation.
Trading journals effectively help the trader in finding out what works for them and what doesn’t. With every logged entry, the trader can identify bad and good trades after they have had some time to reflect, thereby knowing what to do better in the future. A trader may opt to improve their game plans for each and every day, or find a pattern as to which stocks they invested in had the highest yields and which ones do not work out. Proper use of a trading journal can lead to lots of gains while also preventing astounding losses.
How to create one in 2021?
There are many ways in which you can invest your effort towards logging in your daily trades. Traditionally, traders use a pen and paper record-keeping method wherein they write down their transactions. Many say that this helps them remember their trades better and truly, if it works, it is a sufficient method for a trading journal. However, are there more advanced ways?
One way that many employ is the use of spreadsheets in order to keep track. Be it Google Sheets or Excel, this trading journal provides the trader with their trades quickly while also perform calculations in an automated and formulaic manner. A well-engineered spreadsheet will automatically update your wins and losses once you log to a trade and will help you become more efficient in record keeping.
Another way is through software and applications that are made specifically for logging trades. Some have built in pages for posting trades and will provide functionality such as charts, tickers, times of trades, prices, etc. With these, you get the automation of a spreadsheet with a more convenient interface in a specialized application made specifically for this purpose.
This being said, if you do not have a trading journal yet but are performing trades on a daily, it is suggested that you hop on a trading journal now. The sooner you start your journal, the more information you will be able to utilize for future trades, earning you significantly more and more.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.