Recording Performance Statistics for More Chances of Success

The act of recording the statistics of your trades lets you know the flaws of your trading system. From there, you can now pinpoint which areas have more room for improvement. If you are not sure which statistics you need to consider, here are the bare minimum that you can record:

  • Net profit. It is the total gain excluding the losses and expenses. When we say expenses, we refer to the money we spent for commissions, equipment, and others in order to trade.
  • Win and loss percentage. A win percentage is dividing all your trades with all your wins. The same is true with the loss percentage. You take all your losses and divide them by all your trades.
  • Largest winning and losing trade. When calculating the average of your wins, you can exclude your most significant winning trade, especially if it is unusually massive compared to your other wins. Excluding it from the calculation will give you more accuracy in your statistics. The same is true with calculating your loss percentage. Try excluding your biggest losing trade if it is comparably massive to the others.
  • Average winning and losing trade. You can the average winning trade by dividing all your gains by all your winning trades. The same is true with calculating your average losing trades. Divide all your profits by all your losing trades.
  • Pay-off per trade. It is the difference between your average winning and losing trade.
  • Average holding time per trade. Divide all the holding times of your trades by the total number of your trades.
  • Profit and loss of long trades and short trades. This is to know which type of environment you excel in.
  • The most significant number of consecutive losses. This refers to the worst-case scenario that has happened to you so far.
  • The average number of consecutive losses. This will help you know your average decline and manage the possible most significant risks you may encounter along the way.
  • Biggest drawdown. This is your trading system’s worst peak to valley period.
  • Expectancy. In every trade, this is the average win or loss that you can expect. To calculate the trading expectancy, multiply the average loss by the loss percentage. And then, subtract the answer from the win percentage multiplied by the average win. You want to calculate this because you want to know the accurate position size and your trading method’s profitability.
  • Psychology and errors. You can also record your feelings and emotions when you trade. Consider recording your errors too so that you will not forget them, and you can correct them on your following trades.

Do we really need to record our statistics?

These are only some of the basic statistics that a trader records in his trading journal. This might not be too important for some but recording statistics is one way to keep track of a trader’s progress and performance. Recognizing and accepting your trading mistakes can help you become a better trader because only then can you improve and correct them. It also helps you in choosing the best position size and trading conditions for your personality.