Are You Keeping Records of All Your Share Dealings?

If you are an active investor who regularly buys and sells shares then it's absolutely imperative that you keep records of every single transaction. Not only will this help you prepare your tax forms at the end of the year, but it will also enable you to analyze every single trade you make.

If you really want to become a successful investor then you need to use some kind of trading method, otherwise you're effectively speculating that a share will go up, and pretty much gambling with your own money. Once you have a trading method and you start buying and selling shares, you can then look at every single trade in order to see which trades worked out well, and which ones lost you money.

There is no excuse really for not analyzing your trades. All stock broker accounts have full records of each trade you make so you can always log into your account and view them this way if you don't wish to keep a proper trading diary. The only way you are going to become a more profitable investor is by learning from your past mistakes and tweaking your system so that it generates more and more profitable trades.

It's very easy to idle along buying any shares that take your fancy or look temporarily oversold, but these impulse trades can be very expensive in the long run. This is why it's always a good idea to scrutinize every single trade. By doing so you can identify these bad trading decisions and eliminate them from your future trading.

Another benefit of keeping records is that you can assess how well you are doing when it comes to market timing. For example you can quickly see if you bought a share too soon, took profits too quickly, let losses accumulate too fast, and so on. Stop losses should be enforced rigidly and your winning trades should ideally be allowed to run as long as possible, so by viewing all of your trades, you will soon see if you are actually applying these rules or not.

So if you not as successful an investor as you would like, try looking at your share dealing records. This will give you valuable information such as where you are going wrong, why trades are not working out as you had expected, and what you can do to improve your profits in the future. As with most things, if you want to become better at something, then you have to learn from your mistakes.

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