[The Trading Edition] Episode 32: Trading is "Business". A true statement that marks your own growth, an honest financial statement ??️

In the last time (the 31st session), we talked about the “scanning” that finds promising opportunities from a vast number of stocks. Instead of relying too much on convenient tools, it was important to first define the "pattern (Grade A pattern)" you are good at, with humility.

Now, this time we finally enter “Chapter 11: Proper Record Management in Trading.” Why do professional traders never neglect keeping meticulous records?

1. Trading is not gambling, it is business

Many beginners treat trading as a “game” or “gamble.” They take positions on a whim, celebrate when they win, blame the market when they lose, and forget about it. There is no accumulation there.

However, professional traders are different.They treat trading as a “serious business.”

As a business, there must be a “bookkeeping” system. Just as healthy companies reflect their health, cash flow, and wasteful expenses through financial statements, traders too need an indispensable “financial statement” to objectively evaluate their performance.

That is the “trading journal.”

2. Memory tends to be polished; that’s why you must record

Why must we write a trading journal? Because “human memory is astonishingly convenient.”

We remember big, successful trades with pride for a long time. But trades that violated rules and caused big losses, or those held too long without cutting losses, are pushed to the bottom of memory unconsciously due to embarrassment.

Dr. Elder states that record-keeping is “the most important tool for self-improvement.” By keeping a trading journal, we are confronted with the swings of our emotions and the “bad habits” of repeating the same mistakes as objective data. It is often a painful task to face our immaturity head-on.

However, only those who face that pain honestly without running away can overcome weaknesses and move to the next level.

3. The three perspectives to write in the journal

So, what specifically should the trading journal record? Merely recording the “price bought” and the “price sold” is not enough.

Pros learn to record at least the following three perspectives.