In addition to the fairly high-tech diary we just reviewed, I want to give you a low-tech method for keeping track of planned trades.
You may look at a chart and see a beautiful trade starting to come together—only it is not there just yet. You may notice a stock sinking on low volume towards its multiyear support zone. You may say to yourself, “If it comes down a bit more and this support holds, I will buy it.” Sounds like a good plan, but what are the chances of you remembering it three weeks later, when the stock actually does what you expected? By that time you’ll be looking at other stocks and dreaming of other trades, oblivious to the fact that your first pick is doing exactly what you expected it to do. You may notice it only many weeks later, when you accidentally glance at its chart and then it hits you—you missed another fantastic buy!
The best trades come together slowly. You notice them from far away and have to wait for more pieces of the puzzle to emerge before you can pull the trigger and place an order to buy or sell short. Meanwhile, you have to keep an eye on the developing trade.
Years ago I became very impressed by a low-tech system my good friend Margret used for keeping track of her trade ideas. Margret, who died last year, was a terrific trader. I invited her to be interviewed for my book Entries & Exits, but she declined. She was modest, even shy, kept a low profile, lived in the Caribbean, and did not want to draw attention to herself.
“My niece gave me $18,000 to trade for her,” Margret said to me once, “and I turned it into $60,000. Now she thinks I may know what I am doing.” “Your niece is right!” I said.
On one of my first visits to her tropical penthouse I noticed that her desk stood in a niche, the size of a small room, facing out into the hall. That niche had a few shelves with Margret’s books and papers but also several large bulletin boards, with charts pinned to them. Margret explained that whenever she saw a trade starting to come together, she printed out the chart and marked it up with a red pen, showing what the stock had to do in order for her to buy it. Margret pinned those charts to the walls of her trading niche. Whenever she walked to her desk she saw the charts with her own hand-drawn action signals. There was no way this woman, who grew up poor, was going to let a good trade pass her by.
If you decide to implement Margret’s method, be sure to take the charts down from the wall after you enter the trade or decide to pass it up. Make sure the visual records on your wall are fresh and up-to-date.
You may look at a chart and see a beautiful trade starting to come together—only it is not there just yet. You may notice a stock sinking on low volume towards its multiyear support zone. You may say to yourself, “If it comes down a bit more and this support holds, I will buy it.” Sounds like a good plan, but what are the chances of you remembering it three weeks later, when the stock actually does what you expected? By that time you’ll be looking at other stocks and dreaming of other trades, oblivious to the fact that your first pick is doing exactly what you expected it to do. You may notice it only many weeks later, when you accidentally glance at its chart and then it hits you—you missed another fantastic buy!
The best trades come together slowly. You notice them from far away and have to wait for more pieces of the puzzle to emerge before you can pull the trigger and place an order to buy or sell short. Meanwhile, you have to keep an eye on the developing trade.
Years ago I became very impressed by a low-tech system my good friend Margret used for keeping track of her trade ideas. Margret, who died last year, was a terrific trader. I invited her to be interviewed for my book Entries & Exits, but she declined. She was modest, even shy, kept a low profile, lived in the Caribbean, and did not want to draw attention to herself.
“My niece gave me $18,000 to trade for her,” Margret said to me once, “and I turned it into $60,000. Now she thinks I may know what I am doing.” “Your niece is right!” I said.
On one of my first visits to her tropical penthouse I noticed that her desk stood in a niche, the size of a small room, facing out into the hall. That niche had a few shelves with Margret’s books and papers but also several large bulletin boards, with charts pinned to them. Margret explained that whenever she saw a trade starting to come together, she printed out the chart and marked it up with a red pen, showing what the stock had to do in order for her to buy it. Margret pinned those charts to the walls of her trading niche. Whenever she walked to her desk she saw the charts with her own hand-drawn action signals. There was no way this woman, who grew up poor, was going to let a good trade pass her by.
If you decide to implement Margret’s method, be sure to take the charts down from the wall after you enter the trade or decide to pass it up. Make sure the visual records on your wall are fresh and up-to-date.
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