|You may also want to include another portion of your portfolio notebook
where you can write comments and note to yourself regarding on what it was that you saw on
the chart or the reason that you took the actions that you did.
|This may sound trite, but it will prove to be most valuable when you
begin to have a steady run of losses OR wins as you will be able to look back and see what
it is that you do most consistently.
|Try to concentrate on making a gain every time. Why this is nearly
impossible, you should strive to make "something" on any trade that does not go
immediately against you.
|You also want to make a point of writing down at which point you will
exit your trade and why you chose that point. Do this
BEFORE YOU ENTER the TRADE ! You must do this to define your risk
|You must make that decision while you are still not involved with the
stock as you will not bias your opinion in order to protect your pride. You may not
think this to be a problem as you read this, but let it stay in the back of your mind, and
you will NEVER forget this, when it happens that you can not force yourself to draw a line
and exit a losing trade.
|Paper Trading can actually be a very enjoyable hobby until you have built
your confidence and understanding of the markets as well as funded your account to a point
that it is affordable to trade.
|As a general rule, you should be able to keep your total commissions,
entry plus exit, to less than 3% of the total amount riding on the trade. This would
mean that the stock would only have to move 5% for you to be holding a winning hand.
management rules will determine when you sell and how far against you that a trade may
fall before you will sell it.
|Keep the Rule of 72 foremost on
your priority list and you will always do fine.