THE NEW TRADING OF A LIVING GOOD RECORD-KEEPING “ There is no free lunch. As with so many other things, either you’re going to pay up front or you’re going to pay on the back end for being disorganized, and unfortunately, when you pay on the way out it’s always more expensive...” writes Andrew J. Mellon in Unstuff Your Life. The market is perversely inconsistent in dishing out rewards and punishments. There is always a chance that a poorly planned trade may bring profits, while a well- planned and carefully executed trade may end in a loss. This random reinforcement subverts our discipline and encourages sloppy trading. Good record-keeping is the best tool for developing and maintaining discipline. It ties together psychology, market analysis, and risk management. Whenever I teach a class, I say: “Show me a trader with good records, and I’ll show you a good trader.” Writing down your trade plans will ensure that you don’t miss any essential mar ket factors.
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By rahul roy -
THE NEW TRADING OF A LIVING PRACTICAL DETAILS Catastrophic Stops: A Professional’s Life Jacket Soon after moving to a house near a lake I bought a kayak, and immediately went shopping for a life jacket. All I had to do to be legal was to have a jacket in the kayak—any cheap piece of junk would suffice. Still, I spent good money on a quality jacket that felt snug and didn’t interfere with rowing when I wore it. All I planned to do with that kayak was to paddle peacefully on a lake, not any where near white water or currents. I never expected to actually need that jacket. Did I waste my money buying it? Well, if ever some motor boat clips me, then wear ing a high-quality jacket can make the difference between life and death. It’s the same with stops. They’re a nuisance and often cost you money. Still, there will be a day when a stop will save your account from a life-threatening collision. Keep in mind that a bad accident is much more likely in the market th