Documentation after a trade

Posted By Robert On Sunday, January 19th, 2014 With 0 Comments

I document like a dinosaur – as in I still like to use Mr Excel and I like to print out charts and stick them into pretty notebooks.

Why is documenting important?

  1. You can see your progress over time.
  2. If you document properly and honestly, you can see what you are doing right and what you need to improve on.

Whilst brokers provide clients with records / statements of trading, it is recommended that you maintain your own records as well.  Even just a simple excel spreadsheet is a good start and if you are honest when filling it out, you can see where/if you are making any silly mistakes.  It’s pretty boring and annoying to do… but sometimes you gotta do what you gotta do to improve :)

In addition to keeping records of trade instructions given, some traders also recommend that traders keep a record or diary of the reasons that they entered each trade, how they felt during the trade and the result of the trade. It is important to keep records both for yourself and the adviser with whom you are dealing and often the taxman may be interested to see what you have done throughout the year.

When you document, do you make note of your reasons for entry/exits and why it failed? Give it a try and when you go over your progress you will see that a lot of failed trades will say ‘non set-up trade’.

The worst thing is when you take a non set-up trade…and it works ha. Then you get into bad habits because ‘oh it worked the last time I did it’. Donate the profit or have a rule where if you place a non set-up trade you can’t place a trade for the rest of the week.

Individual trade statement

When the client executes a transaction the broker is required to provide the client with a contract note. This transaction statement is sent to the client for every individual trade – buying and selling.   I personally believe the most important fields are the reason for entry/exit and lesson.

End of month statement

Brokers are required to provide monthly statements of trading deals and activity for the period.

Trading record sheet

A record of all trades should be kept by the client to verify from the clients perspective that all details on the monthly as well as single transaction statements are correct.

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