Trade Tracking

What not to do

Let me share how I tracked my trades and transfers when I started in 2017. I initially thought an Excel sheet would be enough to collect all trades and transfers from my various wallets and exchanges. Oh boy, was I wrong. Things escalated quickly. You know you're in trouble when tax time rolls around, and your records are a mess. It took me days, if not weeks, to dig myself out of that hole.

Yes, exchanges can generate CSV or Excel spreadsheets with your trades, but unfortunately, that's still not good enough. You need a tool that can import all your data and calculate your short- and long-term gains accurately.

Key features to look for in a tracking tool

• Overview of Portfolio: Tracking balances of wallets and exchanges

  

• Calculating unrealized profits and losses.
• Tax Reporting: Generating tax reports that comply with your country's regulations.
• Profit/Loss Calculation: Using methods such as First-In First-Out (FIFO) to calculate gains and losses.
• API imports
• Backups
• Tax Loss Harvesting

Tracking Tools

There are various tools available for tracking trades, such as CoinTracking, Blockpit, TaxBit, Koinly, Crypto Tax Calculator and more.

Reasons I chose CoinTracking:

• One reason I chose CoinTracking is that it's located in my home country. This gives me the option to open support tickets in my language if an issue arises. I also assumed that being located in my country means better support of local regulations. Make sure the tool you choose supports your country's regulations.
• Another factor I considered was that they offered lifetime access (capped at a certain number of trades). Personally, I am not a fan of subscriptions, so the lifetime access deal was worth it for me. CoinTracking offers 1- or 2-year contracts if you prefer that option.
• If you opt for a deal that caps the number of trades you can import, be aware that one filled order doesn't equal one trade. Remember the order book and order types: I had orders that ended up being 60 individual trades. This means that you can hit your trade limit sooner than you think.

How to Track Trades

• There are two main options to import your data: CSV and API imports.

With CSV, you have to manually generate the report for every exchange. Access to these reports might be restricted; some exchanges only allow you to generate 5 reports per month, and reports might only be available for the past year or couple of months.

The recommended approach is to use API imports whenever possible. To do this, you need to generate an API key on your exchanges. The API key and secret will be entered into your tracking tool.

• API Security: Always ensure that your API keys are kept secure. Use read-only permissions whenever possible, as this minimizes the risk in case of a security breach. Never share your API keys with others.

Even though your API imports data automatically, I recommend downloading the CSV files from exchanges periodically, in case something goes wrong with the API import.

It's still work collecting data, even when you've implemented APIs. There is constant change. Check periodically to ensure imports are working correctly. Exchanges update their security, which could result in deprecated API keys. Exchanges will notify you if you need to create new API keys.

• Backup and Redundancy: Regularly export your data from the tracking tool and keep a secure backup. This ensures that you don't lose critical information if something goes wrong with the tool. And do a backup before critical changes.

My Staking Nightmare 😭

• Staking is the process of locking up your cryptocurrency in a proof-of-stake (PoS) network to help validate transactions and maintain the network. In return, you earn rewards, often in the form of additional cryptocurrency. It's a way to earn passive income with your crypto holdings.

Sounds great, doesn't it? It's not that I dislike the concept, but it was a nightmare to track the staking rewards and stop the staking process. I staked ADA with the Daedalus wallet. First of all, the Daedalus wallet was not able to show a history of my staking rewards (this was in 2022). So I had to use another tool/website to get a list of my staking rewards. The rewards were paid out every 5 days, resulting in many transactions that I had to track. I have a limited number of transactions available in my CoinTracking account, so this was not ideal. I decided to stop staking.

However, the Daedalus wallet didn't have an option to stop staking immediately. I had to send the funds to another wallet that doesn't stake ADA. So, I moved my funds. But I still received some staking rewards from the last epoch into my staking wallet, so I had to move funds again. All this headache for just a couple of bucks, literally.