It is important to face each day knowing what and how you will trade. This is especially true for position traders, as day-traders must instantly react to quotes on their screens.

A pro does not squint at his charts. Good trades jump at you from the chart and scream here I am, take me. If you have to squint, there is no trade and you should move on to the next stock. A good posi tion trader, or any mature trader for that matter, looks not for the challenges but for the money.

The best time to search is in the evenings when markets are closed. You can review your markets in peace, think, check out other stocks and indicators, and then make your decision-to go long, short, or stand aside. Write down your decision and review it in the morning before the markets open.

Whenever you place an order, especially when you give it to the broker on the phone, it pays to read from a page instead of speaking from memory. Why? Because almost every trader I know has had the embarrassing experience, usually more than once, of accidentally reversing an order. You may want to sell short, but make a slip of the tongue, telling your broker to buy, and seconds later find yourself an owner of a col-lapsing stock. Even worse, there is a temptation to change your order at the last moment-buy more or less than you planned, or switch a limit to a market order. Putting a sheet of paper between yourself and your broker provides a useful layer of protection.

It is a good idea to write down some background for each order. My preferred format includes three lines: Weekly, Daily, and To Do. For example:

Weekly: EMA rising, MACD-H ticked down, deteriorating

Daily: MACD-H bearish divergence, pullback to the EMA in progress To Do: Sell short at 71.30 with a stop at 73, target mid-60s or Weekly: EMA turning flat, MACD-H ticked up from a bullish divergence Daily: EMA up, MACD-H rising, all in gear to the upside To Do: Buy on a pullback to the EMA at 23.25, stop 22, target high 20s

I keep these notes in an Excel spreadsheet. It has a line for every stock that I track, with dates in vertical columns. Whenever I see a trade, I click on the cell for that date and stock, go to the Insert menu, and select Comment. Once I've written my three-line note, a tiny red triangle appears in the right upper corner of the cell. Whenever you move your cursor over it, the comment pops up on the screen. This record-keeping system makes it easy to sweep horizontally and review your entire analytic history of a stock or sweep vertically and review all your comments for that day. I keep my records for the ABC rating system, described below, in the same spreadsheet.

Remember to keep your notes descriptive. If you write something like "weekly charts give a buy signal," that does not tell you anything specific about a stock and will be useless when you look at it a few days later. Begin by describing what you see on the weekly charts, move on to the dailies, and only after that write down your trading ideas on the action line.

Keeping an action plan increases your load of paperwork, but it makes trading more businesslike and less like a swing through a casino. This reminds me of the time I took a group of mostly American traders for a mock trading session on the floor of the Russian Exchange in Moscow. Each person was assigned an interpreter and given a paper bankroll. Everybody had a grand time, trading and taking pictures, except for a lone Dutchman in our group. That market maker from Amsterdam kept furiously scribbling on the back of an envelope as he watched prices on the display panel above the floor. When the session ended and we moved on to the executive dining room, they brought us printouts with our results. It turned out that the group as a whole lost a million rubles. The Dutchman made a little over 900,000 rubles, while the rest went up in slippage and commissions-a pretty common outcome. Good records help create good traders, which is why I encourage you to invest time and energy in keeping and following your action plan.