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THE NEW TRADING OF A LIVING- GOOD RECORD-KEEPING

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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. 

THE NEW TRADING OF A LIVING- PRACTICAL DETAILS

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THE NEW TRADING OF A LIVING PRACTICAL DETAILS Will you be buying stocks that break out to new highs? Shorting double tops?  Buying pullbacks? Looking for trend reversals? Those approaches differ from  each other, and you can make or lose money with each of them. You need to select  a method that makes sense to you and feels emotionally comfortable. Choose what  appeals to you, what matches your abilities and temperament. There is no such thing  as generic trading, any more than there is a generic sport.  To find good trades, you need to define the pattern you want to trade.  Prior to  using any scan, you need to have a crystal-clear picture of what it should look for.  Develop your system, and test it with a series of small trades to make sure you have  the discipline to follow your signals.  You have to feel certain that you’ll trade the pat tern you’ve identified when you see it.  Different styles of trading call for different entry techniques, different methods of  s