This 24th video of the Learn2Trade series is one of the most crucial videos for all traders to succeed in the stock market in the long term. In this video, Mr. Vivek Bajaj explains how to keep a trade journal and evaluate every trade for profitable trading. Analysis of the trades is crucial whether a trader makes a profit or loses money. Traders can improve and change their trading methods and strategies by analysing each trade. He will emphasize the value of keeping a trading journal. He will go into more detail about what should be included in a trading journal and how traders can track each trade. Additionally, when closing a trade or booking a profit, he will note the changes in the trading journal.

Watch this 24th episode to learn why a trader's discipline is crucial for success in the stock market and how he can achieve it by maintaining a trade journal in Excel.

What You Will Learn

He says that while derivatives and options will be discussed later, the first 23 sessions are crucial in building a solid foundation.
He compares the trading technique to a revolver, emphasizing that he has provided the necessary tools, akin to handing over a revolver. However, using the technique effectively is a complex task. He points out that, like shooting a revolver, there are intricacies involved.

Conducting a thorough analysis to determine whether the intended target was successfully achieved becomes crucial in this process.
Comparing a trading journal to a personal diary that records one's ideas and errors, he introduces the concept of a journal as an essential tool for traders. The trading journal is a self-reflective tool that helps traders identify areas for improvement and their decision-making process.

Using Google Sheets, he shows how to create a trading journal and lists the necessary columns: date, open or closed position, scrip name, buy or sell, quantity, value, entry and exit prices, profit or loss, trade logic, comments, and karma score. The karma score reflects the trader's overall satisfaction with the trade, regardless of profit or loss, underlining the significance of discipline.

He places a strong emphasis on the necessity of consistency and discipline to keep up with the trade journal, which functions as a record of trading activity and a report card for traders. In order to make tracking more manageable, he advises using conditional formatting to recognize open positions.

He also suggests including a column for trading methods, which would allow traders to identify and monitor the performance of particular strategies over time. He urges traders to evaluate and improve their strategy based on their past performance.

The session provides real examples of how to enter trades, establish stop losses, take profits, and adjust the trading diary accordingly. He gives a thorough tutorial for traders, particularly those who are new to the market, by explaining how to compute profits, losses, and percentage gains.

In his introduction to the concept of karma in trading, he emphasizes that it's essential to follow one's own course of action in addition to considering profit and loss. Traders may evaluate their discipline and commitment to their trading plan by using the trade journal and its karma score.

He emphasized the need to keep a trade journal for at least six months as a way to improve temperament, learn from mistakes, and foster discipline. He tells traders that constant negative karma is always a sign of a problem, either with the strategy or the trader's execution, and suggests reviewing the introductory sessions or getting advice from another mentor.

Overall, Vivek Bajaj's 24th session in the Learn to Trade series provides essential insights into the need for self-analysis, discipline, and keeping a trade log for continued success in the dynamic world of stock trading. The realistic examples and step-by-step instructions make this video an invaluable resource for both new and seasoned traders. The link to the Excel sheet for creating a trade journal is shared, allowing traders to implement the concepts discussed in the session.

Frequently Asked Questions (FAQs)

Q1. In the stock market, what is the significance of keeping a trading journal?

A trading journal is an essential tool for traders to analyze trades, reflect on their own actions, and make better decisions. It helps determine a person's strengths, weaknesses, and potential growth areas.

Q2. What essential elements should a trade diary have in order to monitor effectively?

The date, open or closed position, scrip name, buy or sell, quantity, value, entry and exit prices, profit or loss, trade logic, comments, and karma score are all important elements that should be included in a well-organized trading journal.

3. What role does the concept of karma play in trading, and why is it important?

In trading, karma is a trader's overall sense of satisfaction with their discipline and commitment to their trading strategy. It provides a comprehensive assessment of a trader's dedication to their desired course of action, going beyond simple profit or loss.