The benefits of a trading log

Inflated Dividends Nearly Ready

The beta testing of Inflated Dividends seems to be going really well. If we don’t find any problems in the next week, we’ll start offering the service for $4.95/month with a one month free trial. Beta testers will get two months of free service as thanks for their help. If you’re interested in being a beta tester or just trying out the service, drop us an email at contact@dividendium.com and help us drive it through the homestretch this last week of testing. All we ask of our beta testers is to tell us if they see any problems.

Subprime Is Not Sublime

You might have heard some of the brouhaha about subprime lenders lately. At least two of the better known ones have been regulars in our “Highest Paying Dividends” lists, NEW and NFI, but if you followed our advice about watching payout ratios, then you probably don’t own them. These are good examples of companies stretched to the limit in good times. Then when even a little bad news comes that stretches them just a bit further, they break. It’s also a good reminder to have stop loss orders in, which means knowing before hand how much you are willing to risk in a given trade.

Support for the Site

Wanted to thank our users for the donations we’ve received. Also wanted to note that a good way to donate to the site without any extra expense to you is to make your Amazon purchases through out Gifts page. A link at the bottom allows you to search for anything on Amazon and we get a percentage of the sale, and its the same price whether you buy it through our link or go straight to Amazon. So if you enjoy the site and find it helpful, please make your purchases through us.

Para-Who?

If you go to our Gifts section, you might notice the absence of the Paraliminal CDs mentioned in the last post. We had submitted a request to that company for a free CD so we could try them out and let you know what we thought. On their website they have an offer for a free CD if you put a link to their website on yours (which we did in our last post). We also signed up to be an affiliate for them to sell their CD. Turns out they emailed and told us they have an unstated rule against getting the free CD and being an affiliate. So we cancelled our affiliate account and waited for the free CD to arrive after emailing and telling them we had cancelled it. Given that was more than a month ago, and we haven’t even received an email reply, we’re going to stop holding our breath waiting for the CD.

Benefits of a Trading Log

But I’m still looking for ways to improve my trading and remove the emotion from it. One thing that has helped me recently is to keep a trading log. Before I place a trade I record:

1) Exactly why I bought a stock
2) What circumstances could change to cause me to sell it
3) What my stop loss or the amount I’m willing to risk is
4) How I expect to profit (profit target, trailing stop, dividend capture, etc.)
5) The buy-in price and number of shares
6) The buy-in date

And when I sell:

7) The sell date
8) The sell price
9) The sell reason (stop loss, profit target, circumstance change, etc.)

This gives me a plan to follow, so I’ll know what I need to do and when. Since our brains tend to shutdown under stress and go into fight or flight mode, it’s very helpful to have this all laid out when I am thinking straight, which means before I buy the stock.

Another helpful thing I’ve been doing is not checking the market during the day. If I don’t see the minute by minute jumps in my stocks, its much easier to think clearly over the night about any changes that happen during the day. And since I have my stop losses in, I’m not worried about missing something. I couldn’t catch anything any faster than my stops can so why waste the mental effort worrying about it.

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