It’s the end of a long day and maybe not your best trade day. You look at your bottom line and feel nothing but defeat. Should you give up? Is it time to throw in the towel? Having a bad day in the markets can make you feel like giving up. But professional traders know that it’s the long game that matters. But if you’re not keeping a trade journal, that one bad day could be your last. And it doesn’t have to be!
Trading is an endurance sport. You should be constantly training, learning, and doing to be an accomplished athlete and the same can be said for an accomplished trader. But, how do you measure your progress? A professional athlete may keep track of their endurance times, their weight, or their strength as measured by activities they perform. As a trader, you should be measuring your trading statistics in much the same way.
As a trader, we can track our success and roadblocks by looking at our trade statistics and our trading log/journal. We can look for patterns to see if we can identify strengths and weaknesses that need our attention. But how do you know what you should be measuring or tracking?
Some very important elements to pay attention to when analyzing your trade stats are:
- Net profit
- Gross profit/Loss
- Commissions
- Max drawdown %
- # of trades per day
- % Profitable
- # of wins/# of losses (Win/Loss Ratio)
- Profit factor
- Average time in market
- Largest winning/losing trade
