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
- Max drawdown %
- # of trades per day
- % Profitable
- # of wins/# of losses (Win/Loss Ratio)
- Profit factor
- Average time in market
- Largest winning/losing trade
It is important to get into the routine of logging your trades daily. We encourage our traders to keep a master trading journal for you to log your trades so you can track your performance and decision-making behavior. You can also take screenshots of your trades to look back over and assess your trading so you can learn from your strengths and weaknesses. Traders should review your stats after a given period of time to adjust your account risk and position sizing.
You can track these statistics on an excel spreadsheet or even buy a Trading Journal software to automatically calculate these percentages. We like Trading Journal Spreadsheets for their ease of use and clear format. It’s one of the many things we include for our Mastery Program Customers to help them on their path to success.
Now, let’s look back at that opening scenario. You’ve had a bad day in the markets. But, when you look at your trading journal, you see you’ve had a good week overall. You’re discouraged, but know that you’re still making progress as a trader. You can now look back at your patterns and see if there was something specific or different you did that you can avoid in the future. If a professional athlete has a bad day, they look back on their results and then train harder to remove those weaknesses. With the right mindset and careful tracking, your tracking can also lead you on the road to success!