Keep Accurate Records
Keep accurate records and track your own progress
This is important for a few reasons:
- By tracking your own progress you can make sure you are on track.
- Good records help you check against your broker’s records. You know exactly when you bought and what your stop loss was – so you can calculate the finance and sell date and price exactly.
- It is the only way to keep track of your emotional resolve. Write in your daily trading diary the entry price, the reasons you were getting into the trade, how you felt at the time etc. If your trading starts to go off, it‟s a reality check on how your state may be affecting trades.
- Occasionally we get into trades for the wrong reasons or break our rules. Accurate records and reasons help keep us honest.
- Completing a trade according to your plan is more important than whether the individual trade made money or not (so score/reward yourself based on your ability to make trades accurately, including keeping your records).
- Records may be needed to prove to the tax man you were treating this as a legitimate business..