Do you need a crypto trading journal?

There are not many people left on this planet who have not yet heard about cryptocurrencies.

Indeed more and more people consider investing in cryptoassets, or have already done so.

Some will just dab in it for fun, others will trade actively to generate profits and yet others will choose to put part of their savings into a well-researched cryptocurrency.

Why do investors use logs at all?

One of the side-effects that cryptocurrencies brought about is the democratization of investing.

In the bygone era, investing was only for the upper crust of the society. Back then, wealthy people would hire a company to manage their assets for them for a small provision.

These days, anyone can invest and yield profits. By and large, cryptocurrency markets are unregulated and there is no license needed to participate in them.

With the democratization of trading and investing that came with cryptocurrencies came also the tools for traders and investors that are demanded by people who want to manage their assets themselves.

In this article we will look into the easiest and fastest ways to track your investment decisions on cryptocurrency markets.

Long-term holders vs traders on crypto markets

Bitcoin was created in response to the financial crisis of 2008. Its creator, known under the pseudonym Satoshi Nakamoto, launched Bitcoin by publishing a whitepaper that defined the technology behind cryptocurrencies. In it he claimed that Bitcoin is free from external influences.

The global financial markets typically crash with disasters, natural or man-made. The reason for it is the relation between government policies and monetary policies.

Cryptocurrencies promise a wholly different approach and that is why these days many people flock to cryptocurrency investments for the long run.

These investors are called long-term holders. They are not interested in daily price fluctuations because they see their cryptocurrency as a slowly growing savings account.

On the other hand, a good portion of the crypto market consists of active traders.

Traders will buy an asset to speculate on its price changes within the next few days.

Short-term traders will see an opportunity to profit from these quick price fluctuations by buying and selling an asset in quick succession. They are not planning to hold it for longer than a few days or months.

Crypto Trading Journals in Excel for Long-Term Holders

As a long-term holder, you will benefit from even the simplest trading log in a spreadsheet.

Use your spreadsheet to jot down at which price you bought, what were your plans for that purchase and how long you want to hold it. This will make sure that you will not forget you have a cryptocurrency investment at all. Yes, that happens!

If you are a more diligent investor, a good information to keep in check is your portfolio balance. This is a time-tested asset management method that crypto investors learned from the world of legacy finance.

For example, you can decide that having more than 80% of your money in Bitcoin is too much. Knowing that, open your spreadsheet log once a month and note the total value of your Bitcoins at the current price. Then write down the amount of traditional currency that you have in your bank account.

If your bitcoins make more than 80% of the total sum, you can sell some of them to get closer to 80%.

Crypto Trading Log Apps for Active Traders

If you are an active trader, you make many transactions every day. This increased activity makes the value of your cryptocurrency holdings fluctuate a lot, even within a single day.

There are still many traders, on legacy as well as blockchain markets, who choose to log all this manually in a spreadsheet.

It is a laborious task but many traders will sing praises to the trading diary as the only way to learn from your own mistakes.

Thanks to these traders we now have copies of spreadsheet trading logs for active active traders adjusted from the forex markets to cryptocurrency markets.

However, these days a good part of daytraders and swing traders on cryptomarkets already swears only by trading journal apps. Automated journaling is often available for free, the software providers are earning income from advertising. That makes the growing preference for journal apps quite obvious.

Because all cryptocurrency trading happens online anyway, using a journaling software is easy and amounts to connecting the journal app to your trading platform’s API. All your trades are automatically read by the trading journal app, all you need to do is check your statistics and annotate your trades to learn from them and improve.

Summary

Both long-term and short-term crypto investors will benefit from trading log, even if it is a very simple one. Logging your investments does not have to be an arduous task even if you trade actively. Using a trading log app is easy and in many cases free of charge.

hinanaaz

I am a professional digital marketer & blogger, contributing content on various high-quality guest blogging sites. mail id: [email protected]