Common terms found in your TradeLog™ software are clearly defined below.
Broker Import
Trade history data is imported into the software from online transaction reports provided
by an online broker. TradeLog™ currently supports two methods of importing:
copying and importing from within a web browser, and
downloading and importing a file from a broker web site. If your online
broker is not currently supported, your trade history may be imported from a
generic Excel (*.xls), text (*.txf) or Quicken (*.qif) file with a minimum of
formatting - click here for more
details.
Clearing Firm
Although most online brokers usually provide their clients with some
type of trade history report, all transaction data actually comes from a
clearing firm. For this reason, some online brokers will send their
clients directly to the clearing firm's web site for trade history reports.
For example, CyberTrader sends their clients to Penson Financial for trade
data. To
see if this is the case for your online broker, please refer to our
Broker Import Support page.
Closed Position
For a particular Trade Number, when the number of shares that have been
closed/sold equals the number of shares that were previously opened/bought, the
trade is assumed to be "closed", or complete.
Closing Transaction ("C")
For a long position, the "sell" is the closing transaction; for a
short position, the "buy" is the closing transaction.
Data File
Each file containing imported/manually entered trade transactions is
referred to as a "data file". Data files are created and saved by
using File menu options. These files are identified by the file
extension *.tdf.
Error Log
When a transaction with erroneous data is imported, an error log (filename
"error.log") containing the details of the errant transaction will be
created on the user’s hard drive in the default data directory (C:\My
Documents\TradeLog4). This file enables the user to locate and adjust the errant
transaction quickly.
First In, First Out (FIFO)
The First In, First Out method assumes the items you have purchased first are
the first items you sold, or otherwise disposed of. As this is the
default trade-matching method used by the IRS, this is the default method used
by Tradelog™.
Gains and Losses Report
The Capital Gains and Losses report is designed to be
used as an attachment to the IRS Schedule D (TradeLog™ users) or Form 4797 for
traders who have elected the "mark to market" method of accounting (TradeLog MTM™ users).
The report can be generated at any time so users can track their trading gains
and losses throughout the tax year and avoid trades that could result in loss
deferrals due to wash sales.
Grid
The display of all imported/manually entered trade transactions in a data
file is the "grid". Users can filter the transactions displayed on the
grid at any time by using the All, Open, Closed and Range buttons, by using
Find menu options, by enabling the column Grid
Filter, or by creating a custom filter with the Grid
Filter Builder.
Import Filter
Trade data is imported into a data file via an "import filter".
Each supported broker has a custom "import filter" that reads and
interprets the trade history report data during the import process. As an
import filter is specific to a trade history report for a particular broker, it
must be revised whenever the online report format is changed by the broker.
Negative Shares
TradeLog™ generates a "negative share" error to notify the user that
trades have been matched incorrectly in the data file, resulting in more closed shares than were previously opened.
In most cases, the trade matching issue has been caused by changes to ticker descriptions due to stock splits or mergers, missing or errant
trades on a broker report,
and non-chronological importing by the user. Most "negative
share" errors can be quickly resolved by manually editing one or more
transactions - please see Solving Common Problems.
Open Position
For a particular Trade Number, when the number of shares that have been
closed/sold do not equal the number of shares that were previously
opened/bought, the trade is considered to be an "open position".
Opening Transaction ("O")
For a long position, the "buy" is the opening transaction; for a
short position, the "sell" is the opening transaction.
Profit/Loss Calculation
As only closing transactions capture or realize profit, your Profit or Loss is calculated and
displayed for each individual close transaction. Profit and Loss is also
provided for the entire Trade Number. TradeLog™ uses the FIFO (First-In, First-Out)
method of Profit/Loss calculation, which subtracts the average price of the
number of open transaction shares from the close transaction amount including
commissions and fees.
Record
Each line item, or row, on the grid display represents an individual
transaction, or "record".
Trade Date
In accordance with IRS regulations, TradeLog™ uses trade execution date as
opposed to settlement date for all trade matching, wash sale calculation and
reporting.
Trade Matching
Per IRS regulations, TradeLog™ uses "First-In, First-Out" (FIFO)
trade matching. The first imported trade transaction is assigned Trade Number (TrNum)
1. If the second imported transaction has the same ticker description, it is
matched to the first imported trade, and given the same Trade Number. If the
third imported transaction has a different ticker description, it is assigned
the next Number (2). When a transaction is long, the subsequent sells are
matched to the buys. When a trade is short, the subsequent buys are matched to
the sells. For a discussion of how TradeLog™ assigns trade numbers,
please see our User Guide item How TradeLog Works.
Trade Number (TrNum)
Upon import/manual entry, trades are grouped and tracked by Trade Number (TrNum).
Trade numbers are automatically assigned by TradeLog™. As multiple open and close transactions
(long or short) for the same ticker are grouped as a single trade, users can
quickly see their total profit or loss for the entire trade.