Maintain a Proper Trading Log for Successful Day Trading

A trading log is a document that a trader can use in order to keep track of every aspect, of each trade, that they take. Keeping a proper trading log is a critical part of being a successful day trader and many people overlook the importance of keeping track of this information. Here are a few things to consider about maintaining a proper trading log for successful day trading and why it is so important.

Trading Log

Successful day traders utilize a trading log. A trading log is simply something that allows you to keep track of all of your trades. In a good trading log, you will keep track of the time and date of the trade, as well as the price that the trade opened at and the pricet. You should also keep track of what stock you bought and sold.

Evaluation

One of the primary benefits of maintaining a trading log is that you can properly evaluate your trading method. If you do not keep track of what you are doing, it is very difficult to determine if you are doing a good job. It is critically important to log what you are doing so that you can see if there are any areas that need to be improved. Successful traders are continually evaluating their methods and adjusting them in order to be productive.

Tax Purposes

Another good reason to keep a trading log is for tax purposes. When you file your taxes at the end of the year, you will need to know the cost basis for all of the trades that you have made. If you do not know what you bought the stocks that, you will not know how much profit or loss you made. When calculating your taxes, you need to know the cost basis and the sale price for every single trade. Without a trading log, it can be very difficult to obtain this information. You should never rely on your broker to provide you with this information.

Spreadsheet

One of the best ways to implement a trading log is to create a spreadsheet. You can do this with any standard spreadsheet software that you have on your computer. You simply need to create a column for:

  • date
  • time
  • name of the stock
  • cost
  • price that you sold the stock for.
  • total of the profit of each trade
  • notes might be a good idea so that you can record any thoughts that you have about a particular trade

Software

Another option that you have is to purchase a software program that is specifically designed for this purpose. There are several software programs that you can purchase with the goal of creating a trading log for yourself. Compare a few of the programs for your specific needs. You may also want to consider a trial run to see if the tracking format works for you.

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