Maintain a Trading Journal to track your Skill Level - Download Link at Bottom

If you don't want Stress in  Your Trading then learn How to manage your Trade - Now most of the traders know how to enter in the market (with their own wish - But don't know how to exit - how to manage the trade once we are into the trade -how to handle the chaos )  either we enter with our 

• Trading System Rules 
• Due to our Excitement level to do something 
• On news base 
• Tips Provider 
• Gut feeling 
• Random Entry Etc 

 We can enter in the market with our own  wish - and  once we are enter the real game starts -if the trade goes against us most of us don't know how to handle the Chaos - Say for example this market is like a Riots what we call  DANGAL a civil disorder by a group of people - In Riots our first Priority is to Protect our selves with the Damages and to be safe at our place - This Market is also same once the Market is open the Dangal (Riots)  Starts  and we are enter into this place - and once we are enter the unexpected things starts to happen -and we are trap in human emotions and our thinking may get paralyzed  Now here your Skill comes into play -how you handle this Chaos Skillfully and be safe -  When the trade starts to go against us we become Emotionally Unresponsive - we keep on hoping that the Stock will come again to break even - and we keep on damaging our Account with this attitude 

Detachment and  Be a Observer is the key - For better Decision Making 

Say for Example on the Street you are going and a accident takes places of a vehicle and you are the witness of that Incident (A observer) - Now those two people who met with the accident can be able to give correct justification of who's fault is it ?

Answer is No 

Cause their Ego and attachment comes in their way 

Then who can Give it ?
Its You 
Cause you are the Observer without any  attachment towards both of them and you can easily recognize  who;s  fault it is 

Same Approach we should  maintain in trading - just be a observer of the things and you will instantly recognize you current state   

Probability of trading outcomes with Proper Risk management  

We will take the most simple  Trading system (Fliping the coin )  -with proper money management rules

Our Rules
Cut your losses
And let the profit Runs

Say we have 10 trading outcomes with risk reward ratio of 1:3

Heads we win = and we gain 3 points
Tails we loose = and we lost 1 points

Now here we don't know what will be the sequence of outcome that when the head will arrive or when the tail will arrive - but our stop loss (Risk)  is define that is one point

First flip Tails = loss one point 

Second Flip Tails  = loss one point 

Third Flip Tails = Loss one point 

Fourth Flip Heads= You win 3 points 

Fifth flip Tails =You loose one point 

Sixth Flip Tails = You Win 3 points 

 Seventh Flip Heads =You win 3 points 

Eighth Flip Tails = You loose one point 

Ninth Flip heads  = You win 3 points 

Tenth flip Tails = You loose one point 

If we notice in the above trading out come our winning Ratio is only 40 %
And we have lost 60% of the time and still we are making 6 points Gain 

i.e. = 4 head profits = 4*3= 12 points
= 6 tails loss = 1*6 = 6 points
 Therefore Gain of 6 points


To track our trading skill i have created a Trading journal - which i fell very important for traders to maintain it on each trade - which in turn will help us to understand our skill level in long term
also i have given explanation for   R multiple % and Expectancy in the Sheet - if you want more understanding on this above concept please read the books of Van tharp


In the  trading excel sheet i have given some examples to understand the sheet and its outcome over 30 trades

If you have any further suggestions on the trading journal sheet please share - so that we can make a better trade management system


Trading Journal link
http://www.4shared.com/file/DSpXNWd-ce/tj_online.html?


A Nice video on Trading Psychology
https://www.youtube.com/watch?v=lNrFx3vnjWo