Journaling Tips

An old Haven member wrote out these journaling tips for other members & it has been quite a hit, so we’re sharing it here.

DISCORD JOURNALING TIPS

This is a little write-up of how i managed to bring my FOMOing and market buying under control through journaling.

Do you often market buy and end up instantly underwater? Sometimes to get stopped out, sometimes becoming stressed out before price finally goes your direction? Either way the stress you feel during both those scenarios are unnecessary and can be avoided.

I’ve definitely experienced my fair share of stress due to shitty entries and FOMO. So much i decided that i wanted to quantify and change my approach to how i entered my trades.

If you’re anything like me, you’re a bit stubborn and generally distrusting of things, often preferring to find things out for yourself over taking things at face value.

Combine this with crypto’s amazing volatility, was a toxic combination for my portfolio development, as i knew i shouldn't ape as much as i was. General wisdom being you want to ladder your buys, be patient etc. The problem a lot of people(including myself) have with that approach, while its completely logical, is that its not as exciting as slamming that market buy button on a coin that looks ready to head towards the moon. It just doesn’t give you the same kick of dopamine.

Here comes another one of those pieces of wisdom so many of us heartily ignore: Emotional trading will fuck you and your portfolio up equally.

I, after a string of losses, decided to find out HOW much it was fucking me up. Before we start going into the details of how exactly I journaled my trades to help with my FOMO. I have to preface this with saying that if you aren't journaling at the present moment and are struggling with trading, start ASAP. There’s a lot of great content in the haven on journaling. I use most of what the analysts talk about.

My Journaling Setup

I have my own private discord channel with different channels such as trading rules, trading wisdom, trading experience, trading ideas, technical stuff like how to bridge, security, etc.

Its really up to you how you want to structure it. For trades i use the following form, which i got from CryptoCred

Time&Date

Screenshot of Setup

Direction: (Up or down)

Risk %: (How big is the SL for the trade? For example 5%)

Size: (How big is the trade in whatever currency you use)

Setup Name/Reason for Entry:(Ticker/PAIR, type of trade, like breakout, and why you’re entering.)

Risk:Reward: (Can use Tradingview for this)

Entry Price: (Self explanatory)

Stop Loss Price: (Self explanatory)

Take Profit Price: (Self explanatory)

Did I Trade my Plan: (Did you follow your plan, take profit at TP or get stopped out. Or did you cut it early/not follow the plan you made as you entered the trade?

Trade Management Notes: (I write if i took profit at TP1 for example, or got stopped out)

Results: (Profit or loss in % and/or currency amount).

Emotions when taking the trade: (Describe your emotional state during entry, forces you to recognize where you are emotionally when entering, allows you to see patterns in your profit and losses and how you feel during each of them.)

Feedback/notes to self: (What could’ve been done better?)

Could i have gotten a better entry?: (This part i added on my own, basically if i couldn't have gotten a better entry i just write No, if i could i will write Yes, and by how much. For example: Yes, 1.5%. Meaning price went down/up from my entry by 1.5%. We will get back to this part later)

This form i fill out every trade i take and post them in the Trades channel on my discord, if the trade is a win, i put it in the winners channel. If its a loser i put in the loser channel. Simple enough.

Here’s how the a trade will look when taken and after its either become a winner or loser

After

In this example XTZ was a winner, with a before and after picture on each timeframe posted. Showing how the trade progressed.

What you won’t find out just as easily however is how you’re doing over a period of time. And how frequent certain mistakes where, what the hit rate for a period was, etc. After all crypto can really mess with our sense of time due to its 24/7 nature.

To solve this i added something called a weekend review that i do every Sunday, there i go through all the trades I’ve taken from Sunday last week, up to the Saturday the day before the review.

Due to the period reviewed being relatively short, making adjustments becomes quite easy, its easier to steer a ship once a week than once a month for example. It allows for week to week improvement over sporadic improvement that often requires you losing a substantial amount of money.

The weekend review form i fill out every Sunday

Week X(basically whichever week it is your reviewing, last week it was week 39): 26-02(The days i go through)

Amount of trades: (Just the total amount of losers/winners)

Winners: (Spot) (Futures): (The amount of winners you've had in pure numbers, write amount of winners in spot in front of (spot) and amount of winners in futures in front of (futures)

Setup with the highest win rate and the biggest winner: (Basically the setup with highest win rate, whether it be breakouts, retests, whatever setup you like to play, and just the biggest winner % wise)

Losers: (Spot) (Futures) (The amount of losers you've had in pure numbers, write amount of losers in spot in front of (spot) and amount of losers in futures in front of (futures)

Setup with the highest failure rate and biggest loser: (Same idea as above, write the setups with highest failure rate and biggest loser in %)

Hit Rate: (Just the hit rate, take your winners divided by total amount of trades)

Adjustment: (Here i write the adjustment for next week, in the latest weekend review its the adjustment for this week, be it less breakouts, more conservative plays, etc. I try to read this every day of the week so i can really focus on making the adjustment in question, and not writing them down just to forget them til the next time i do the review.)

Point of it is i can gather information from a more zoomed out perspective.

Now for the purpose of this entire wall of text: Through the entirety of this September i did an experiment where i every weekend review would add up all the times the trades i took for the week did and didn't give me a potentially better entry. Basically adding up all the times the trade didn't give me a better entry, and summarizing the total amount of potential % missed by not being patient and letting the trade come to me. The result of documenting every trade taken during September

Roughly 50% of the time the trade would move against me before either invalidating or continuing in the desired direction. The amount missed by having a bad entry was around 1.96% per trade. Meaning that 50% of the time i either could’ve made 2% more profit, or lost 2% LESS when the trade stopped out. Most of the trades where i missed the 2% was when i aped when price was above support if longing or under resistance if shorting. If I’d just longed support or shorted resistance as you’re supposed to. I would’ve eliminated most of the missed %.

Now the % missed in my case might not be the same as your numbers, and the % isn’t really as important as knowing HOW much you are missing by FOMOing. Instead of relying on someone else’s experience of “Dont FOMO”, you have now done the work and know exactly how much you lose per average by aping. You’ve now taken some conventional wisdom and made it your own, making it much easier to not to. “Don’t FOMO/market buy” is much more vague, and not as compelling as your hard work and the information and numbers you’ve now gathered through your journaling.

You might not think 2% is a lot, but i urge you to ditch the “make it all in one trade”-mentality. And instead take the average size you put into a trade, whether it be 2K, 20K or 200K. And multiply that amount by 1.01^100. That’s what you stand to make in a hundred trades(1% because in my case 50% of the time price would move against me, 2/1=1, quick maths).

So for example: If your average trade size is 2K$ over a hundred trades you’d make an additional: 2000 × 1,01 ^ 100 = 5409,6 - 2000(subtracting to get additional profit without starting amount of 2K) = 3409$! And this is not counting whatever additional profit you might make during those trades. And its also based on the numbers i gathered during September. Who knows, you might stand to make even more by having better entries!

As i said, the % and numbers aren't as important as gathering your own experience and data. Also as your portfolio grows, eventually you will HAVE to start optimizing your entries, due to slippage. You’ll lose more and more both in terms of % and pure currency. So better start before you lose tens to hundreds of thousands of dollars in dumb entries.

An additional thing i started doing this week, now that I’m finished with finding out what exactly my shitty entries were costing me, was the following: How much profit did i miss by not following my plan?

This one was a bit easier to gather data on, as luckily, i don’t cut that many of my trades too early.

I started by summing up the total % of all my losses, subtracted by the amounts lost by me cutting too early and not following the plan for the trade. So basically how much i really would have lost last week if i stuck to the plan.

The result

If I'd followed each trades plan, total profit for the week would be roughly 82.6% and total loss 34.3%. Landing my net profit and loss for last week at 48.3% total. This also includes me not fucking up setting a stop loss, so if i lost 5% when my stop loss was 3% from entry, i subtracted 2% from the total loss amount as that amount comes from me not following my plan.

I also went through the trades where i could've gotten a better entry, like i outlined earlier. And found that the ones with the biggest difference from my entry to optimal entry were ALL apes/market buying. Further hammering home what I’ve discovered through journaling. But also showing that not all trades are the same, the % missed due to bad entries where generally due to a couple of trades with a big difference between my entry and support/resistance(depending on if long or short). Meaning that not all trades where i could’ve gotten a better entry had the same % in difference, most of them had roughly 1%, and some had a whopping 2-3.5%, with the bigger ones always being the ones with the most retarded entry due to aping/emotional trading.

Last week, the total % missed over the 7 trades where i could've gotten a better entry lands at 14,45%, or roughly 2,064% per trade where an better entry could be found.

Now if we add the missed % (14,46), to the gains missed due to retardation, we land at a total profit of 82,6+14,46=97,06%.

Take that amount - total losses lands me at= 97,06-34,3=62,76% net profit. Bear in mind total profit probably would've been way higher if i instead focused exclusively on the coins showing strength.

The power of journaling

The point of all of this, is to get my own reference point to think about whenever i want to cut a trade early/ape a trade and not be patient. I really think finding out the cold hard truth for yourself might be more effective than just trying to internalize someone else's experience, if you do this you have your own numbers and data relevant to your system and your performance to fall back on and refer to in periods where emotions might be spiked.