The Trader’s Secret Weapon: Documentation
One of the healthcare certifications I hold as an Emergency Medical Technician (EMT) is the Certified Ambulance Documentation Specialist (CADS) credential. This training helps ensure that I am providing the best documentation possible for each patient that I encounter, and I treat each and every report as if it should be needed to survive the strict scrutiny before a jury in a court of law. Although my past habits of “playing in ditches” at 3am are becoming smaller and smaller in the rear-view mirror of my medical career (I’m no spring chicken anymore), this skillset has become extremely valuable in my trading process.
You’ve heard the old phrase “you can’t tell where you’re going unless you know where you’ve been”. You’ve probably also heard the phrase “if it wasn’t documented, it didn’t happen”. This holds very true in the aspect of trading and investing. By documenting and tracking your trading and various other processes, you can more accurately evaluate if your trade plan is serving your needs or if it needs to be adjusted or in some instances completely overhauled. I’d like to share some considerations you may want to check out.
What time of the week do you tend to see more productive trades in general? This serves a couple of purposes… to provide a schedule that maximizes your trading efforts, and possibly more importantly, how to maximize your down time. Trading can be extremely taxing to the body and mind. If we can see generalized patterns of more productive times during the day or week or month, we can more easily treat ourselves to restful activities that recharge our batteries. Have you noticed when you are faced with a problem you just can’t solve no matter how many angles you approach it with, only to leave for a few minutes and come back and solve the problem almost immediately? Down time can be just as important if not more important the “on stage” time.
How are you feeling while you are trading, and what is your overall attitude during the planning or execution of each trade? Are you documenting this? Trading while you have a headache or other body pains, or while you are stressing about a relationship speedbump or any other type of obstacle can be very unproductive, or even downright harmful to your capital account and/or, even more importantly, your mental account. Evaluating your mental state can be just as important as anything else.
Did you follow your plan? Is your plan able to be replicated and evaluated by others? Have a trading partner read through your plan and try to place a trade simply by following your instructions, then have a “debriefing” session to have a candid conversation of what can be improved upon. How clear is the process for them? If they are lost or confused, it’s highly probable that you will be also. Make sure your plan is crystal clear, then follow it EVERY TIME.
Run your plan past an experienced trader (ie: instructor or mentor) for feedback. These folks have been through about every scenario imaginable and can often assist in avoiding common pitfalls that can be extremely detrimental to a newer or intermediate trader.
Are you squeezing the most out of each opportunity? By documenting exactly what happens with each trade, determine what the highest achieved risk-to-reward ratio was past the actual exit to see what was missed, and if your risk management is effective you can constantly improve your process. An analogy of this would be similar to a predatory cat in the Serengeti… once they capture their prey, they don’t allow a single ounce of it to go to waste. By picking every bit of meat off the bone of each and every trade, you can strive to potentially maximize each opportunity.
Can you prove your activity if audited? If you own a corporation, you may be required to track many aspects of your daily activities. By documenting these things, you may stand to fair better if called upon to prove your financial statements or verify certain qualifications such as Trader Tax Status.
Just like in emergency medicine, where every detail can be the difference between success and failure, trading demands that same level of precision and accountability. Documentation isn’t busywork—it’s your audit trail, your mirror, your teacher. Whether you’re fine-tuning your trade plan, evaluating your mental state, or squeezing more profit from each setup, tracking everything gives you the power to adapt and evolve. So treat each trade like a patient report—thorough, honest, and built to withstand scrutiny. The more seriously you take your process, the more likely you are to build the kind of consistency that turns trading from a gamble into a profession.