How to keep track of abilities for D&D 4e?

What are some effective ways to keep track of my character's various abilities? I would prefer cheap or free tools.

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I print out my power cards as shown in character builder (9 per page), and then use a marker (candy, pennies, beads) and just place it on the sheet when it's used. For special powers (like dailies that can be used 2x per day or something) I just put multiple markers on them. Keeps things very simple. At the end of the day, I just eat... er... remove all the markers.

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Transparent file folders. Slide your character sheet in, grab yourself a dry-erase marker and just mark off abilities as you use them. Wipe clean after a rest. I like this method because it persists through the week when you end a gaming night mid-encounter.

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Cards are very useful. You might also check out weem's combat sheet, which gives you room to list all your abilities organized by what they do -- i.e., you have a place to list defensive abilities, a place to list reactive abilities, and so on. This is really handy when you're trying to remember that, oh yeah, I can do this really cool thing when someone hits me.

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I have a character sheet modeled off the one at the back of the PHB. It includes hit points, equipment, feats I've taken, languages and the master list of my powers.

As for using the powers in combat, I use handmade 3x5 cards. I write all the details about it (pretty much copy text from the book), and include my attack bonus and damage dice with any bonuses from feats or equipment added. I also include entries for circumstantial situations ( like "Combat Advantage: +1d8 sneak attack damage" ). I write the name color coded for Daily(Black) vs Encounter(Red) vs At-Will(Green) vs Free(Orange). For things that can be used 2x a day/encounter I make two cards. I make a card for other standard things I want to remember I can do as well: Second Wind and Use Action Point (and any class features).

During combat I'm always shuffling through my cards as the situation changes, keeping the ones I'm planning to use at the top. When I use the power or action, it gets flipped over into the used pile. If its a sustained power, it stay face up in front of me until it ends. After the party has a short rest, I can grab all the encounter/free actions (red and orange) from the used pile and I'm ready to go again... well, once I make sure my healing has been taken care of!

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I find cards can be useful if I want a reference for the exact wording of a power, but I find them too cumbersome to use in actual combat, especially as you get to higher levels and start getting more and more powers and items and especially if you don't have a big space to play in.

Instead, I use a master list on a single sheet of paper that lists all the character powers with a bare minimum summary of what each power does written beside it. I find it makes it easier to decide what to do by scanning down a single page rather than shuffling through a stack of cards, but that's just my preference :)

I also find it handy to put my magic item powers (especially the encounter ones) in the list with all my other powers as I forget them otherwise.

Anyway, it ends up looking something like this...

[blah blah initiative, defenses, saving throws, etc. etc.]

+3 Feyslaughter Longsword
MBA: +24 vs AC, 1d8+15. Crit: 23 + 3d6 (or 3d10 vs. Fey)
OA: +29 vs AC, 1d8+15.
Burst: +24 vs. Def, 1d8+11. Crit: 19 + 3d6 (3d10 vs. Fey)

At-Will
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Tide of Iron.  Str vs AC. Hit: 1[W]+Str mod dmg, push target 1 sq, shift 1 into vacated space
Footwork Lure. Str vs AC. Hit: 1[W]+Str mod dmg, shift 1, slide target into space left.
Knockdown Assault. Str vs Fort. Hit: Str mod dmg, knock prone

Encounter
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Come and Get It. Close Burst 3, pull 2. Secondary atk: Close Burst 1, Str vs. AC. 1[W]+Str mod dmg. (1d8+11)
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Strikebacks (item).  Imm. Reaction when hit with melee attack, make MBA vs. that enemy

Daily
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Rain of Blows (stance). Deal 1[W] (1d8+5) dmg vs. enemies that start turn adjacent
Unyielding Avalanche (stance). Gain regen Con mod (1), +1 power bonus to AC/saves, Deal 1[W] (1d8+5) damage and slowed until EoNT vs. enemies that start turn adj.

Grimlock Helm (Item). Minor Action, Gain Blindsight 5 & become blind until EoE
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Utility
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Pass Forward (At-Will). Move Action, Move speed & don't provoke from 1 enemy if you end adjacent to that enemy.
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Use a spreadsheet. I personally use a custom character sheet I created in OpenOffice.org Calc. My abilities are condensed into brief descriptions and I can just check them off as I use them. I use conditional formatting on the checkbox cell to grey out the line. I also have short rest and extended rest macros to go through and clear them out. Being a psion, the augments are in the cell comments.

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Note: By "various abilties" I assume you mean abilities the English word as opposed to the DnD concept of abilities.

I knew a group who printed up playing cards representing their powers; when they used the power they'd turn the card upside down or sideways. (on the other side would be the same description of the power, but kind of grayed out)

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If you have an iPhone or laptop, you could use iplay4e.com - it imports characters built with character builder, and then lets you track pretty much everything you could on a character sheet. If you have the infrastructure, there's no additional cost.

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I use a version of Weem's sheet, but one created by myself. It's functionally a checklist of "Stuff that happens on my turn" and "out of turn actions" with all of the decision trees roughed out.

Because the fuctional creation of a cheet-sheat pre-articulates most strategies, I don't have to spend time in combat figuring out what my options actually are, just how to apply them.

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