Record your Trading Transactions!!

From past many days I was playing Badminton and I was unable to take up some of the shots. And then always my opponent used to win the series at the end of the day. So I was disappointed and thought for the reason behind my failure. Then I came to know that I should review my every game and every shot to check on any drawbacks I have in my game playing, then I can correct the mistake by not repeating it again. And then one fine day I was also a winner. So that was the case with my game which is to improve my health. But I do also play a game called Trading which is for monetary gains.

Trading is not difficult, but it’s risky. The chance of losing money is more than the chances of winning it. So I used to bet all the time and 90% of the time I used to end up losing some good money. This has led to depression and disappointment and I started to look back on the trades I made, and starting analyzing as what has brought to lose money so critically.

Then came the reason:

I never used to record and review my trades. Every successful trader records his trades and if he loses the trade, he learns from his mistake and will never repeat it.

So first important point is: Analyze your Mistake and Never repeat it. We as human beings with faulty memories simply forget many of the circumstances surrounding our best and worst trades and as a result we will learn very little from them. So recording our trades is the utmost important point.

Think and perform

By and large the gap between what we think we do and what we actually do is very embarrassing. We think that we will complete this exercise today within 10 minutes, but actually when we are doing the chance of doing the work in the stipulated time always is less. We complete it by taking more than 10 minutes. And this is called human-mind. And trading is not an exemption. In trading too, what we think and what we actually perform during trading always differs. And thus causes embarrassment.

Maintaining a trading Diary

Maintain a diary to record all your trades both successful and unsuccessful. So that there would be no chance that you could lose the trade, provided you don’t repeat the same mistake.

Here is a list of three key issues that should be covered in every trade dairy:

1. What did you trade and why?

2. Where is your stop loss limit and why?

3. Did the trade work out as planned?

The above guide is very handy for beginners too and I think this would lessen our losses in our trades to a large extent.