Saturday, January 15, 2011

Importance Ok Keeping A Trading Log

Keeping A Trading Log

I wanted to make a quick post to you guys on the importance of keeping a TRADING LOG.

A trading log allows you to stay organized and keeps close tabs of ALL your trades. This way once the markets close and things cool down, you can sit down and look thru trading log and see what you were doing right and wrong.

This is the BEST way to:
1. see what you are doing right.
2. see what you doing wrong.
3. are you over trading?
4. are you undertrading(scared to trade)
5. are you being too aggressive with your position sizing.
6. see what type of of patterns/trades/setups work best for you or work least for you.
7. see which stocks/sectors work best or worst for you.
8. See what time of the day works best or worst for your of trading.

etc etc etc!

Anyway, you see the point i am trying to make! A trading log GIVES YOU VALUABLE FEEDBACK folks!

A trading log should literally help make you "DISCOVER" who YOU as a trader!

An example of a Trade Log i have used in the past might look this: I would use an EXCEL SPREADSHEET to do this:

Date: Long/short Symbol Entry Exit #Shares $P/L %PnL Held Pattern

Jan.1 LONG SPRD 18.50 19.00 1000 +$500 +2.70% 1 day Bull flag

Jan.2 LONG CRUS 17.00 17.65 1000 +$650 +3.80% 2 days breakout trade

Something like this!!

Things I learned from keeping a trading log:

i am not good at holding stocks for more than one week. (Now, i need trades to work quickly or else i am out, keep my money constantly working)
I suck at trading solars, gold and silver stocks. (i minimize activity in these names big time)
i suck at trading triple etfs(FAZ, TNA, FAS): (So i stopped trading them completely!)
I am NOT a scalper. When the market is very choppy, i sit tight and DO NOTHING! I just watching until a momentum stock come to life.
I hate shorting when markets are in strong trends higher.
I suck at catching FALLING KNIVES. So i avoid this strategy. I much rather be catching hot momentum stocks. Buy them as they rip and sell them on further strengths.
I play well with stocks that moving on strong volume: Stocks moving on above daily average ALWAYS catch my eyes first as momentum is likely very high in these plays.
I suck at trading a lot(over trading). Too many trades cloud my judgement. I like to do less than 10 trades per week. A lot of trading gives me anxiety and stress. So i keep my trading to a minimum and only get aggressive when i see a 'HOT HAND".

I would have never found this out without keeping a detailed log of all my trades and have that log give ME feedback which is so incredibly valuable in trading! LESS MISTAKES made equals less money lost while working thru that vicious learning curve and also helps to direct you onto the right path to profitability.

Hope this helps! Remember, the more detailed the log the better!

Happy trading!

No comments:

Blog Archive