This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apprenticed Investor: Write This Down

Keeping a trading diary will help you accomplish these things: It will force you to maintain your pre-purchase checklist . It will also make you articulate why you made certain purchases. That often turns out to be important in the evaluation process later on, when trying to determine just why you bought that pig.

Having a clear idea of why you own a specific name will put you in a better position to see your entire investing picture. It gives you insight into your own performance. On an individual stock level, you may discover what tactical errors you may be making. Are you being too impatient? Are your stop losses too tight? Or are you letting stocks get too far away from you before you finally cut them loose? Technical traders might find that they are getting sucked into a false breakout; value investors might be buying cheap stocks that keep getting even cheaper.

The diary is also a good way to avoid repeating the same errors. I much prefer to discover new and different errors (and do so all the time!).

I don't mind the occasional error -- if I can learn something from it -- but I try never to repeat the same mistake twice.

Lastly, and perhaps most importantly, your trading diary will help you improve your overall strategic performance. Doing a post-mortem on your trades will help you adjust your strategy and philosophy. Are you over-trading? Are your positions too large? Perhaps you are bucking the major trend. Regardless, a good trading diary will help you understand exactly what you are doing right and wrong.

Words and Numbers

Let's get into the nitty-gritty of your trading diary.

There are two aspects to this. The first consists of documenting each individual position before purchase; this is simply another part of your pre-purchase research, and it will help you in your review process. The second aspect is analyzing your investing performance afterward, something we will get into in more detail in a later column. (For a preview, check out this link.)
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.01 -2.70%
FB $104.02 -5.90%
GOOG $684.00 -3.40%
TSLA $162.60 -7.26%
YHOO $27.97 -4.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs