I want to be disciplined in 2013 in my trading. How do I measure discipline and how do I increase it? I think one the ways is to keep good trading records.
Traders look at charts, but I feel that it is more important to look at myself, as personality is very important to trading. I believe that when I analyse my trading records, I will improve myself. This is very similar to Chess. When I was a serious chess player, I analyzed a lot of my own games, especially my losses, as I believe that it helps to improve my play more than analyzing other peoples' games.
According to Alexander Elder, there are 5 types of records that a trader needs.
1. Trade Spreadsheet
I have a spreadsheet that list all my trades, including entries and exits, profits/losses, commission paid etc. I plan to add columns to grade each entry, each exit, and each trade.
2. Portfolio Spreadsheet
Portfolio curve tracks each portfolio that I have. Measures the % gains/losses, % winners/loses, % annualized rate of returns, % maximum drawdowns. I already keep this, but I have to be more diligent to review it.
3 Equity Curve
Equity curve tracks the account equity, and monthly, quarterly, and yearly. Again, the tough part is to keep updating and reviewing.
4. Trading Diary
Visual and written records of trades, noting reasons for entering the trade, feelings, and unusual factors. I started this some time ago, but have since stopped. I must be more diligent to record and review past trades.
5. Weekly Action Plan
An excel to record trading opportunities so as to know each new day, how I will trade. Very important for me to be organized so as to be ready for any new opportunity.
That's it. My main focus in 2013 is to be disciplined to keep good trading records and to review them regularly. Any other accomplishment will be secondary. I quote Alexander Elder in the book "Trading for a Living", 'a person with good trading records is either a successful trader or soon became one.'
No comments:
Post a Comment