Stock market commentary, analysis, insight and opinion of the RightLine Editors is available every Tuesday/Thursday evening & Saturday
afternoon. The following is excerpted from the:
January 16, 2020 - The RightLine Report
Notes From The Editor
Every successful trader knows the importance of adapting to shifts in the market. One of the best ways to track these changes is to monitor your own trades. This allows you to see emerging trends more quickly, and helps protect you from unexpected twists and turns.
When it comes to monitoring tools, nothing beats a trading journal. In addition to helping you spot market patterns, they also help you track trends in your personal trading and identify which set-ups are most effective in the current trading environment.
A simple spreadsheet is all you need. Each row represents a trade, with the left-most column listing the date the position was entered. Moving right, in each column, you have details such as the ticker, the size of the position, whether you bought or sold short, the price you entered, and the stops that you've used. When the trade is exited, the remaining columns are filled in: date closed, net gain/loss in dollars, and net gain/loss as a percentage. For these final two columns, many traders prefer to color-code: red for losses, green for gains, black for breakeven.
To this basic information, it's a good idea to add some columns that help with monitoring. This might include the stock's sector, the prevailing market trend when you entered the trade, and a column for your general comments and thoughts on the trade.
While this may sound like a lot of information, it's actually quite digestible in spreadsheet format. At a quick glance you'll be able to spot patterns that can be used to increase your profitability. Are your tech sector trades gradually becoming less profitable? Are your short trades yielding larger gains? Is a certain sector consistently outperforming? Use this tool to find out! Your account will thank you.
Here's to profits,
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