Risk and Trading Psychology · Crypto Trading Guide
A journal should explain decisions, not merely list profits. Separate process quality from outcomes and identify habits that can be changed.
Record the decision before the outcome
Save the thesis, entry rule, invalidation, quantity, cost assumptions and screenshot time before trading. Afterwards, add actual fills, fees, funding and deviations. Recording only successful trades creates an incomplete dataset. Keep private keys and account credentials out of the journal.
Use comparable performance units
Define one R as the initial planned cash risk. A $40 gain on a trade planned to risk $20 is 2R before any omitted costs. Keep the initial definition fixed even if a stop later moves. A gap can produce a loss worse than 1R. This normalisation makes different trade sizes easier to compare without pretending their risks are identical.
Calculate expectancy with humility
Suppose a fictional sample wins 40% of the time, with average win 2R and average loss 1R. Gross estimated expectancy is 0.40 × 2 minus 0.60 × 1 = 0.20R per trade. If uncounted costs average 0.25R, the net estimate becomes a loss of 0.05R. A small selected sample does not establish a durable edge, and averages can hide rare large losses.
Turn observations into a controlled change
Tag deviations such as entering late, increasing size after a loss or changing an exit without new evidence. Review a defined batch of comparable trades, then change one rule for a stated reason. A pause after repeated process violations can protect the evaluation from impulsive decisions. Do not treat a winning rule violation as proof that discipline is unnecessary. The purpose is a repeatable decision process whose weaknesses can be measured.
Try it yourself
With 50% winners averaging 1.5R and 50% losers averaging 1R, what is gross expectancy?
Show the worked answer
It is 0.50 × 1.5 minus 0.50 × 1 = 0.25R per trade. Costs and estimation uncertainty remain.
Further reading
Educational material. Examples and rates are hypothetical, not trade recommendations. Product terms, eligibility and risks vary by venue and jurisdiction.
