Accurate record keeping is a must for commodity trader. Your broker will provide you with computerized statements of your trading activity, but it is absolutely necessary that you keep your own records as well.
The reason being, you want to know for sure what open positions you have at all times. Your records will tell you where you are in the market. You can also use them to place SL orders and to alert you when a contract is reaching maturity, as well as what GTC orders you left on your brokers desk open.
Since most traders may be long and/or short more than just one or two commodities at a time, a good record-keeping system will keep track of the positions that are outstanding and those that have been liquidated for a profit or a loss. The records are also invaluable at tax time and in checking out statements you receive from your broker.
When you receive a verbal confirmation over the phone from your broker, enter that trade in your records. When the confirmation slip arrives a day later, compare them to see whether what your broker told you over the phone is identical with the info written on the slip. Do the same at the end of the month, when you receive your monthly P/L statement.
There are number of ways to keep records, but the important point is to list all the relevant information. This should include the date, whether you bought or sold, the position size, commodity, and price. Later, when you offset your trade, you will want to calculate your profit or loss, including your commission cost.
By looking at the record, you should be able to know exactly where you stand.In short, by looking at the record, you should be able to know exactly where you stand. If you are in a loss position, this will tell you how much margin you still have left and whether or not you are approaching the maintenance margin figure.
Of course, your brokerage house has a computer that keeps track of all this information, but it helps to be able to anticipate these things rather than receiving a surprise margin call and perhaps having your position automatically liquidated by the brokerage house. On the profit side, your records can tell you what your present equity figure is and perhaps provide a clue as to where your SL orders should be placed.
On the personal, NTR note: have ya ever considered that we are born naked, wet and hungry, and then things get kinda worse…? Huh? Will tell ya more about this later on.
Good trades my friends and take care.