Updating Your Trading Record

Market Meditations | December 4, 2020

As we embark on this bitcoin roller coaster, I hope Market Meditators have a good sense of their profit and loss. Depending on what type of person you are, you will likely either remember your winning trades or only the losing trades. This is what makes it essential to keep a trading record. Numbers don’t lie and, if maintained properly, you will gain a greater appreciation for your strengths and weaknesses as a trader. Let’s explore this in more detail.

Medium and longer term traders may be inclined to compare their average winning trade amount to their average losses. Short term traders may keep a daily profit and loss. Either way, this process will allow you to evaluate how good you are at picking trades and give you a clearer picture of your financial successes compared to failures.

You can focus just on the trade entry price, closing price and amount or to take it a step further, you can also take a note of your stop-loss and take-profit levels and assess how suitability you set these. Some traders may also benefit from noting their ‘rationale’ for entering the trade.

This practise will keep you honest. You will have a better idea of how profitable your trading ventures actually are. You will also be able to spot bad risk management habits. By beginning to hone in on your winning trades, you will be able to get a sense for what you are good at. You can be your own teacher. You may find you are better at technical analysis than you are fundamental. Or, you might find there are particular coins that you trade very well. Alternatively, you might discover some coins you ought to avoid.

Evaluating your results is essential to your success as a trader. Your historical trading record is the best indication of your strengths and weaknesses. This daily habit can reap large benefits in the long run.