Good traders keep good records. They keep them for learning and discipline. Without the good record-keeping, it is not possible to measure our performance as a trader, rate our progress, and learn from our mistakes. If we do not learn from the past, we are doomed to repeat it. If someone wants to become a better runner, keeping records of speeds is essential for designing better workouts. If money is a problem, keeping and reviewing records of all expenditures is certain to uncover wasteful tendencies. Keeping scrupulous records turns a spotlight on a problem and allows us to improve.
I always keep a record of all my trades in a spreadsheet. It helps me analyze my profits and losses. I also try to regularly post my charts on the blog to keep track of my entries, exits and what made me take those entries and exits.
Whenever I open my spreadsheet to put new entries, I force myself to face the reality, the reality of my performance as a trader. Sometimes this reality is very ugly to face, especially during the losing streak. But there is no other alternative but to face it, accept it and keep reminding myself of it every time I put new trade entry so that I become more cautious of it, reduce the trade size and take even less risks.
If you are a trader like me and want to improve, I encourage you to develop this good habit of record-keeping. You do not need any fancy software for that. Just a simple spreadsheet or a handwritten diary will serve the purpose of record-keeping. Click here to view mine.
Traders fail because of impatience and lack of discipline. Good records set you apart from the market crowd and put you on the road to success.