Reconciling the Broker Statement Against Your Log

Two records of the same month look identical until they are laid side by side, and then they are not. The account statement and the trade journal are supposed to describe the same forty trades, and the gaps between them are always the interesting part. The note orb trading routine richiebranson publishes on this covers the mechanics rather than the accounting, because the reason a reconciliation matters to a trading routine is not tax. It is that every number used to judge the strategy comes from the side that is written by hand.

Match on Count First

Before comparing money, compare the number of fills. A statement showing forty two executions against a log with thirty eight entries has already told you something, and it is usually one of three things: a trade taken and never written up, a partial fill recorded as one entry, or an order that worked and filled after attention had moved on.

The missing entries are the important ones. A trade absent from the log is absent from every statistic derived from it, and the ones that go missing are not randomly distributed.

Then Match on Price

Recorded entry prices tend to be the price that was intended rather than the price that filled. That difference is slippage, and it is the number most likely to be optimistic in a hand written record. Reconciling it monthly turns slippage from an assumption into a measured figure, which then feeds into whether a setup with a small edge is worth trading at all.

Commissions Belong in the Log

The statement itemises commissions and fees, the log usually does not, and the result is an expectancy figure computed on gross numbers. On a strategy taking a hundred trades a quarter that is not a rounding error. Bring the total across each month and divide it into the trade count, so every future estimate carries a realistic cost per trade.

What the Gaps Usually Turn Out to Be

Four causes cover almost all of them. An order modified during the session and logged at its original level. A stop loss that filled worse than where it sat. A scaling out recorded as a single exit. And the trade taken outside the plan, which is the one people find last, because nobody goes looking for a trade they have already decided not to think about.

Each gets a line in the reconciliation, not a correction made silently. A silently corrected log no longer records what was done.

Once a Month, Not Once a Year

Monthly keeps the statements short enough to read line by line and keeps the memory of the session close enough to explain a discrepancy. Annually the exercise becomes an audit, takes a full day, and produces corrections nobody can account for. An hour at the start of each month is the whole commitment, and the output is a set of figures the account agrees with.