Brokers & Accounts · Intermediate · 5 min

Record keeping: statements, journal, yearly overview

You can name the records a trader needs to keep, set up a simple trading journal and a yearly overview, and know how long to keep documents.

Two questions, one habit

At the end of every year, two questions come up. What do I owe in tax? And what did I actually learn from all those trades?

Both have the same answer: records. Without them, the tax return turns into a search through old emails, and the year of trading turns into a vague memory of a few big wins and a few painful losses. This lesson shows what to keep and how to organize it, with very little effort per trade.

What to keep

Records come from two sides: your broker and you.

From your broker:

A trade confirmation for each executed order, with asset, size, price, time and costs.
Regular account statements showing what you hold and the cash in your account.
A yearly cost report. In the EU, firms must give clients with an ongoing relationship an annual overview of the costs and charges they paid.
A tax statement, where your country has one. US brokers, for example, report sales to customers and the IRS on Form 1099-B.

From you: a trading journal. For every trade, write down:

the date, the asset and the direction,
the plan: entry, stop, target and position size,
the reason for the trade,
the result, including all costs,
a short note on how you felt and whether you followed the plan.

Once a year, sum it all up in an overview: number of trades, gains, losses, costs and taxes paid. That overview helps with your tax return and shows patterns no single trade reveals.

How long to keep it depends on your country. The IRS, for example, names 3 years as the general period for US taxpayers, and 7 years when claiming a loss from worthless securities. Records of a purchase are needed until the asset is sold and the period for that year has run out.

Learn from the overview

A fictional trader makes 40 trades in a year and fills in the journal for each one. The yearly overview shows:

a net gain of 600 before costs,
costs of 420, mostly currency fees,
most of the losses came from 9 trades marked "no plan" in the journal.

Without records, the trader would remember a decent year. With them, the picture is clearer: costs ate most of the gain, and unplanned trades caused most of the damage. That is something to change next year. The overview also makes the tax return simpler: the realized gains and losses, the costs and any tax already withheld are all in one place, matched with the broker's statements.

Common mistakes

Relying on the broker's archive. Download statements regularly. If an account is closed, old documents can be hard to get.
Writing the journal later. Notes made after the result are colored by it. Write the plan before the trade.
Leaving out costs. A result without costs is not your real result.
Keeping records only for winners. Losing trades teach the most.
Mixing accounts. If you use several brokers, keep one overview that combines them all.

The takeaway

Keep what your broker sends, write down why you traded, and sum it up once a year. Good records help with taxes and with learning.

Check yourself

Quick quiz

4 questions. Instant feedback, nothing is saved.

1Tap the record that only you can write.

Tap the chart.

The broker documents what happened. Only your journal records why you traded and what you were thinking.
2What does a trade confirmation show?

A confirmation is the broker's record of the trade. Keep it with your other statements.
3According to the IRS, how long should US taxpayers generally keep tax records?

The IRS names 3 years as the general period and 7 years for losses from worthless securities. Records of purchases are needed until the asset is sold and that year's period has run out.
4Why does a trading journal help beyond taxes?

Memory is selective. A journal records your plan and your result, so patterns become visible.

of 4 correct.