Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

analyst75

In Trading, What Can Be Measured Can Be Managed

Recommended Posts

I was having a catch up with my good mate and uber cool pad holder Jarrod yesterday – we both share a fascination with human performance. We are both interested in what we can get out of the machine we wander around in all day. As part of this quest he had recently been to see a dietitian who works with several AFL clubs and during the conversation they mentioned that as part of their regime they didn’t count calories. We both thought this was odd for the simple reason that without data you are operating in a vacuum, without knowledge about your calorie intake and in particular your intake of various macro nutrients you are simply guessing. And guessing simply doesn’t count when it come to assessing change.

 

The point here is obvious, if you are not in some way tracking the performance of your trading then you have no means by which to judge your performance. Without having a series of metrics that tell you how you are doing then you are also operating in a state of ignorance and in many cases delusion. I understand that some people dont want to track their system since this would defeat the entertainment component of trading. Knowing how badly you are doing would take the fun out of it. The same is true for people who struggle with their weight – they dont want to know how badly they are doing. Ignorance is bliss.

 

Performance tracking does not have to be complex – it only needs to tell you a simple story, how many trades did you get wrong, how many did you get right, what is your average profit/loss per trade and do you have more money at the end of the year than at the beginning. All this can be achieved in a spreadsheet with a little bit of playing around.

 

Author: Chris Tate

 

I’d like to end this article with some quotes:

 

 

“Be careful! It doesn't matter how good you are, if you don't use proper risk management you will fail.” - Jarratt Davis

 

“Having a diversified system does help but it does still make you wary of taking the next trade. But it always seems to be the next trade that you don’t take that turns things around.” – Chris Tate

 

Article reproduced with kind permission of http://tradinggame.com.au

 

http://www.tallinex.com wants you to make money from the markets

Share this post


Link to post
Share on other sites

Good post.

 

Re:

Performance tracking does not have to be complex – it only needs to tell you a simple story, how many trades did you get wrong, how many did you get right, what is your average profit/loss per trade and do you have more money at the end of the year than at the beginning. All this can be achieved in a spreadsheet with a little bit of playing around.

I recommend adding a few ‘complications’

- an important metric is how much of price's ‘travel’ you do and don’t participate in.

This typically works out to be some permutation of how many potential trades you missed / how many setups and triggers you didn’t take

This metrics opens you ways to access and assess own personal set of dynamics re:

>strictness/looseness of your SETUPs and TRIGGERs, consistency of same, etc...

>bodybrains states

>and how well you recover - from wins and from losses, from victories and defeats, from rights and wrongs, from lucks and no lucks.

> etc etc

(btw it took sorties into the metrics of automated trading for me to really appreciate this metric in manual trading. In all my trading now, the only metrics more important than this one are measures of sizing precision...)

 

other manual trading metrics that may be needed individually ( all trader&system dependent btw )

-how many trades you take that your entry leads or lags too much

-how many trades you take that clearly don't make SETUPs and TRIGGERs threshold

-many manual traders will see their overall performance go up if they consistently set their loss point prior to TRIGGERs work and entry... in some systems even prior to SETUP completion... if your system needs it, simply counting the times you did and didn’t do that will raise awareness... and frequency of the bhvr, etc.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Topics

  • Posts

    • NZDUSD: Retains Recovery Threats, Eyes The 0.6726 Zone NZDUSD: With the pair still retaining its upside pressure on correction, more strength is envisaged in the new week. Support lies at the 0.6650 level. Further  down, the 0.6600 level comes in as the next  downside target. Conversely, resistance resides at the 0.6750 level where a break will aim at the  0.6800 level. A break of here will have to occur to create scope for a run at the 0.6850  level. Further  out, resistance stands at the 0.6900 level. Its daily RSI is bullish and pointing higher suggesting further recovery higher.  All in all,  NZDUSD faces further upside pressure.
    • $BDX (BDX) Becton Dickinson stock narrow range breakout watch, see also $MRK ,


      analysis https://stockconsultant.com/?BDX
    • Meet the Broker in Cyprus Dear Client, The HotForex VIP Contest returns for one more year with exciting rewards for our valued clients!
      Enter the contest to claim monetary prizes from a $10,000 pool!  We are relaunching the HotForex VIP Contest this year too! The lucky 1st Prize Winner and his/her companion will enjoy an all-expenses-paid trip to the beautiful Mediterranean island of Cyprus! 1st Prize > An all-expenses-paid trip to the amazing Mediterranean island of Cyprus, including:
      $5,000
      Two air tickets to Cyprus
      Five-star hotel stay
      Limousine transfers
      One-to-one forex training 2nd Prize > $3,000 3rd Prize > $1,500 4th Prize > $500
      If you have any questions about this or any of the other trading platforms available with HotForex, please do not hesitate to contact our support team, which is available 24/5 in a variety of languages. Kind regards, 
      The HotForex Team
    • Date : 21st September 2018.

      MACRO EVENTS & NEWS OF 21st September 2018.



      FX News Today

      Asian Market Wrap: Stock markets continued to rally during the Asian session after a record close on Wall Street yesterday. Risk appetite is back after robust US data yesterday added to hopes that the fallout from the latest round of US-China tariffs can be contained and that there will eventually be deals on trade and Brexit, despite little progress at the informal EU summit yesterday. Improvements in emerging market assets have also helped to underpin confidence with investors buying back into the rout. 10-year Treasury yields moved up 1.3 bp to 3.076%, 10 year JGB yields jumped 1.6 bp to 0.125% and 30-year yields rose 4.4 bp as BoJ cut bond purchases. Topix and Nikkei are up 1.01% and 1.06% respectively underpinned by a weaker Yen, the Hang Seng has gained 1.13% so far and the CSI 300 is up 1.80%. US stock futures are equally broadly higher, Oil prices are slightly lower and the November WTI future is trading at USD 70.25 per barrel. Today’s calendar includes Eurozone PMI readings as well as public finance data for the UK.

      FX Action: USDJPY has lifted to a fresh two-month high at 112.80 amid a backdrop of a coursing risk-on theme in global markets. The USA30 and USA500 hit record highs yesterday, and Asian stocks have rallied robustly across the board. JP225 hit a 4-month high, and the Shanghai Composite a two-week high, with both showing gains of 1% or more. Expectations for China to turn the fiscal stimulus tap, among other measures, have been helping underpin sentiment in Asia, while the unexpectedly low starting tariff rate of 10% in Trump’s latest move on Chinese imports this week, along with tech sector exemptions, have helped buoy sentiment Global fundamentals are otherwise solid, despite the threat from the trade war escalation (with Beijing not expected to negotiate until after the mid-term elections in the US).

      Charts of the Day



      Main Macro Events Today Eurozone Sep. PMI – Expectations – The Eurozone manufacturing PMI is expected at 54.5, down from 54.6 in the previous month, and expect the services reading to improve slightly to 54.5, which should leave the composite unchanged from August at 54.5. This still suggests ongoing expansion, but would also confirm the decelerating trend. Canada CPI & Retail Sales – Expectations – CPI is expected to hold steady in August after the 0.5% surge in July. The CPI is projected to grow at a 2.9% y/y pace in August, easing slightly from the 3.0% pace in July that was the top of BoC’s 1-3% target range. Canada retail sales values are expected to rise 0.5% in July after the 0.2% drop in June.
      Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

      Please note that times displayed based on local time zone and are from time of writing this report.

      Click HERE to access the full HotForex Economic calendar.

      Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

      Click HERE to READ more Market news.

      Andria Pichidi
      Market Analyst
      HotForex

      Disclaimer: This material is provided as a general marketing communication for information pThis material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • There are many Horrible trading situations occurs in traders life and some are very serious.
×

Important Information

By using this site, you agree to our Terms of Use.