Monitoring price changes using charts is one way to stay updated on the market trends. However, technical or fundamental analyses and tracking other market metrics are not the only means of becoming a successful trader. For example, a disciplined approach that includes maintaining a trading journal would protect you from making emotional decisions concerning your financial investments.In this article, we will discuss the benefits of a trading journal and how to create and use it.What is a trading journal?A trading journal records your trades and their outcomes and gives a summary of your trading experience. However, it is not a brokerage account statement as one can find the reasons behind opting for or avoiding a trading strategy.All successively executed trades are methodically planned, and a trading journal can be a record of the performance of each trading strategy. Regardless of how the market performs, you can adequately assess the potential of a particular trade using a trading journal. Moreover, you don’t need to spend much to create a trading journal. Spreadsheets or Excel would suffice, and it would help you to become disciplined and follow consistent trading strategies. You should record trading entries in your journal if you can’t always stick to your trading strategy. You can figure out how to avoid responding the same way to comparable situations in future trades by noting when things go wrong and why they did so. Why is keeping a trading journal important? Keep reading to find out!What are the benefits of a trading journal?Keeping a trading journal provides many benefits, including helping you to evaluate the strengths and weaknesses of your trading strategy. It helps you make unbiased decisions. For example, one can decide if crypto derivatives best suit their portfolio or if one should start reinvesting crypto profits. The final decision is exclusive of errors in judgment and any irrational beliefs, which helps protect you against an unconscious influence on your investment objectives.Keeping a trading log helps you stay on track with your trading strategy, whether you are a day trader or a swing trader. Becoming distracted by winnings while trading for real money happens easily. After a run of profitable transactions, you can start to use sloppy entry points or acquire more cryptocurrency than usual. A trading plan helps you stay on target and reduces your tendency to make rash, potentially risky trades. Related: Cryptocurrency investment: The ultimate indicators for crypto tradingOne can start trading in the productive zone if they keep track of their trading plans and develop confidence in their skills. Consulting a trading journal can be a tremendous motivator for traders to reflect on how well they have done, and having a successful track record is always a terrific confidence booster. On the other hand, unsuccessful traders can learn from their mistakes and transform unproductive trading strategies into profitable ones.Furthermore, one can also take advantage of what is effective and shift their attention to the current performance by using their journal to track and implement reproducible patterns. This enables traders to generate a steady profit and prevents them from spending time and resources on unsuccessful ideas, eventually helping them to become profitable traders.How to create a trading journal?Any spreadsheet application like Microsoft Excel or Google Sheets in which you record your actual trades and a written document like Microsoft Word or Google Docs to add your thoughts can be used to create a trading journal. You can also start using a free trading journal template like the one prepared by Binance to distinguish between an avoidable and a profitable trading strategy.Regardless of what template you are using, ensure that you have all the necessary columns related to each trade. Additionally, you may take screenshots of the trading charts you have followed and connect them to the appropriate trade on the sheet to make the journal more effective.Let’s understand what columns you should add to your spreadsheet when creating a trading journal:InstrumentAdd the financial instrument you have traded, including the chosen platform; for instance, EdaFace (BTC) on Coinbase. Related: Binance vs. Coinbase: How do they compare?Date and timeAdd any time and date-specific factors that enable you to engage in a particular trade. For instance, I purchased Cardano (ADA), worth $1,000, during a midday trading lull when ADA was available at a lower price at 1:00 pm. During the lull, crypto values frequently decline because most prominent news stories have already been reported by noon.Trade direction (long/short)Record your short or long positions to reassess your trading strategy. By taking long positions, an investor gets exposure to cryptocurrencies in the hope that prices will climb in the future, allowing them to be sold for a profit. On the other hand, when investors sell cryptocurrency “short,” they borrow it and sell it at the ongoing market rate. When the asset’s value declines, the investor buys it at a discount, pays back the cryptocurrency borrowed and keeps the difference as profit.Entry price, exit price and stop lossThe entry price is the price at which you are beginning the trade. The exit price is the value at which you exit that trade. Investors can establish a stop-loss order in trading to automatically place a sell order when and if the lowest price at which they are ready to sell an asset is reached. Record all these metrics in your trading journal. Trade sizeTo understand how much risk you are taking concerning a particular trade, please record your “tradable amount” in the journal. For instance, you risk 70% of your tradable amount on a single trade if your tradable amount is $200 and you swing trade on ADA with $170.Profit and lossIt is crucial to record the outcome of your trade, either profit or loss, to understand what works best for you and what does not.NotesAs mentioned, add your thoughts/notes in Microsoft Word or Google Docs to reflect on why you chose a particular trading size or strategy. Remember that qualitative factors are as important as quantitative ones.How to use a trading journalA flawless trading journal template is a myth. Every trader should review the pertinent metrics they need or should avoid using while adding transactions in their personal trading journals. A trade journal needs to be tailored in light of this.Use your written document to add reasons behind taking particular positions. It is also essential to write down the indicators you spot during your market watch hours to avoid negatively impacting your trading performance. You’ll also argue whether or not a specific trade concept you implemented is a solid one in your written document. Turning your trade proposals inside out and backward will help you see the advantages and disadvantages of each one.Then turn to your spreadsheet, where you need to record your daily trading activities. Remember to keep it up-to-date and organized to measure your success or failure accurately. Finally, try to record trade details after executing the trade to avoid missing any crucial descriptions. Furthermore, checking your trade log spreadsheet daily is a good habit for estimating the level of exposure you currently hold and any possibility of expanding your trading portfolio. But, how to review your trading journal spreadsheet? Read through the documents on the written document and entries in your spreadsheet carefully while assessing your existing trades.As a result, traders can have their tactics performance-driven rather than influenced by their emotions or conduct by looking back at a trading record and spotting trends they should avoid. Therefore, keeping a trading log enables you to evaluate your trades, spot areas for improvement, and generally become a better trader.