Why you must have a "Trading Log"?

Trading Tips (1)
By Markets Chimp

10/12/18 10:04 PM

 

Ramy Rashad, CMT

  • The Trading Log is one of the successful ways to take your emotions out of the trading.
  • You should write, in details, the reasons behind any buying or selling opportunity you want to execute.
  • You must do so BEFORE execution.
  • For example, if you are a technical trader, you might write the following: “I will BUY this stock tomorrow (write the date) because it’s taking out a key resistance level, the trading activity is very heavy, and it seems that the stock is bottoming out. The first target is 5% away from current levels and if i am wrong, I will cut losses if the stock fall 2% below my purchasing price”.
  • Being organized this way and being able to set-up a detailed trading plan beforehand helps you a lot to avoid the emotional trading!
  • If you are going to change the plan after execution, you should also write WHY you want to change it now.
  • Everything should be written, and you must stick to it.
  • You should review your Trading Log regularly to learn from your mistakes that will happen either because your initial reasoning wasn’t right (and this is normal and will happen a lot), or because you didn’t follow your plan (and this a big mistake).
  • Bring a beautiful notebook and before buying or selling a stock, write your logical reasons behind this decision.

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