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.