Here we are in the second part of this series of articles devoted to the Bitcoin trading journal. Today, we will spend time on the essential elements to compose this journal. So fasten your seat belt!
The creation of a bitcoin (BTC) trading journal
Our first draft of the trading journal certainly gave you some insight into the concept itself. This suite will be devoted to practices, in particular to the creation of this journal and its content.
To create a bitcoin trading journal, you will only need a sheet of paper or its digital equivalent. The most experienced traders do not skimp on Google spreadsheets or Microsoft Excel spreadsheets. Indeed, these are of incomparable ease, in addition to the fact that they are modifiable. Adding a few columns to the file will be enough to build a bitcoin trading log.
Be aware, however, that your trading journal will not be effective without a good degree of individual ownership. Thus, you are authorized to personalize it with the insertion in particular of screenshots of trading graphs…
Note also that some automated features in Excel will save you valuable time during the transaction. We will not teach you more about the usefulness of the “Sum” in this spreadsheet. In a bitcoin trading journal, you will certainly benefit from it in calculating the cumulative total of trades, profit and/or loss, etc. And you can also add the percentages as you progress.
Also, don’t forget to answer these questions on occasion:
“How is my daily or weekly performance? »
“What is my best and my worst trading instrument? »
“Which operations have given the best results for me? »
The perfect BTC trading log template does not exist. Bring a personal touch to your journal and do not hesitate to exploit relevant parameters to succeed in your trading journey.
Things to Include in a Bitcoin Trading Journal
Here are a few.
Instrument and/or platform
For bitcoin (BTC) traders, the mention of the instrument or exchange platform must appear in its trading log.
Simple sentences will help you complete this section. For example: “I bought bitcoins on the Lightning Network or sold MATICs on Binance CEX. »
Date and hour
The timestamp of transactions is of utmost importance in the bitcoin trading log. Next to it, it is possible to add comments and other information that can indicate the motivation(s) of a transaction.
For example :
“I made a swing trade – Bitcoin (BTC) short sale at 11:00 a.m. IST on the 1stis February 2022 – to take advantage of the uncertainty surrounding cryptocurrencies in India at the start of the Union budget session. »
Direction of operation
Whether long or short, the position you will try to hold in a trade should also be part of the trading journal. Again, feel free to include a likely time indication for your trade. Thus, you will be able to have a perspective on your transactions, and in the event of a fault, you will be able to make a revaluation.
entry price, exit price, stop loss
As a reminder, we will state that the “entry price” is the price at which a trader entered a trade. When he exits a transaction, he will know the exit price.
Furthermore, the ” stop loss is presented as a tool to help reduce the loss on transactions in the event of a bad call. The price at which you set your stop loss is to be included in the BTC trading log.
You will also benefit from inserting the percentage of your “tradable amount” invested in a specific transaction in your journal. This will facilitate the assessment of the related risk.
Another example: with a negotiable amount of $100, you decide to swing trade bitcoin (BTC) for $70. In other words, you risk 70% of your tradable amount in a single trade.
profit or loss
A bitcoin trading journal must mention the results of a transaction. These can relate to losses as well as profits over a specific period (week, month, etc.).
Here, you are invited to record the qualitative factors taken into account during transactions. The list is likely to be long: fundamentals, new externals of traded instruments, trading tools (support, resistance, etc.).
Now that these elements have been blown to you, we invite you to stay connected on Cointribune to find out the rest of this series. Next, we will discuss the effectiveness of a bitcoin trading journal.
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