Home Crypto Trader Pro 5 Reasons Journaling is Important for Your Crypto Trading Portfolio

5 Reasons Journaling is Important for Your Crypto Trading Portfolio

by Meredith Loughran
, 5 Reasons Journaling is Important for Your Crypto Trading Portfolio

Keeping a journal is not just for the writers and poets, pining teenagers or romantics. Keeping a journal is an excellent and important resource to stay abreast of what’s going on in your life. People use journaling for mental health, keeping track of their diet and fitness journey, and yes, among other things, they keep a journal for trading.

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If you’ve been trading for a while, certainly you have some form of a journal, whether it’s a spreadsheet, or a notebook, archaic, I know, but a combo of the two actually works for me.

Of course, journaling seems to be the latest trend, giving the perception that people really want to be in touch with their goings on, or at least give you the perception that they are, that sometimes if feels like it’s lost its intrinsic value, replaced by the latest fad. Smart traders cut through all the “influencer” noise because they know better. Trade journaling actually takes discipline and consistency to maintain, which is why the fakers will eventually fade away and the serious traders will continue on.

It’s a little surprising that more traders don’t practice journaling, but I’m coming from the perspective of a writer so I guess I’m predisposed to jotting things down. Obviously, writing down your trade pairs, the buy in or sell price, BTC price, time, and amount you want to trade is uninspired and dull, but it doesn’t have to be just numbers and dates. In fact, I would argue that your trade journal have more information.

Below are five reasons trade journaling is important.

Dynamic Data

Dynamic data is what I call the information that I put into my trade journal. Not only do I include the actual data of the trade, I make a point of highlighting some of the blockchain and cryptocurrency news, and what’s happening in the stock market.

Why? Because those events seem to trigger more volatility in the market and I personally see a correlation between stock markets rising with consumer confidence, and the subsequent drop in crypto – or vice versa. Essentially, I’m tracking these things in a working hypothesis so I know how I want to leverage my trades.

Businessman and author, Robert Kiyosaki said, “The best way to predict the future is to study the past, or prognosticate.“

In my experience, everything is cyclical, even the markets; maybe not replaying the exact prices, but it does have a tendency to repeat patterns. Having a written history lets us see what happened then to foretell what might happen later. There’s a reason why people get a little anxious and excited around the holidays; because we want to see another pre-Christmas boom in the market.

Is that cyclical or self-fulfilling prophesy? Write down your theories and see if it comes to fruition later on.

Problem Detector

Data can also help you know where a potential problem is coming from and the solution to it. As an example, my daily journal includes my sleep and diet information, giving me key evidence as to why I might be feeling tired and lethargic some days.

When i’m eating healthier, I tend to sleep better and be more productive during the day. Snack food and too much couch time actually triggers migraines the next day. Why not use the daily journal to monitor my trade portfolio health?

It makes sense, right? If I see a pattern of problems on paper, I can actually make adjustments based on a documented pattern rather than guessing.

Solution Finder

The data partner to being a problem detector is also being the solution finder in your journal. In speaking to novice traders, I’ve found that the majority of them fail to have a consistent trade schedule. If they actually kept a journal, they might hold themselves a little more accountable to their market actions.

Keeping the journal might also indicate what’s worked in the past to get through a losing streak, or help you maintain a better winning streak. In any event, by flipping through your journal, you might find solutions to issues you’ve been going through.

Confidence Booster

Knowledge = Confidence. Journaling can give you a bit of a confidence booster because it literally lays down what you’ve been doing, how you’ve been trading, the wins and the losses.

New and seasoned traders would do well to mark the wins, but having insight into your trading habits can also curb issues and build up your self-confidence to keep the momentum going.

I’ve mentioned in earlier, but consistency is the key.

Proof-of-Why

Ah, data. Without it we are lost. The more you log into your trading journal, the better insight you will give your future self.

Let’s just say that your future is not determined by your past, but it sure can influence it. If things are going south, turn to your journal for the proof-of-why it might be trending that way.

If you’re keeping tabs on things like your mood, sleep and diet, the news highlights, and where the markets are, you might find correlations between all of them, which may affect your trading habits and help you pin-point what needs adjusting.

Over time, writing in your journal will become second-nature and you will have a plethora of information to refer to when the time comes. Give it a try!





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