Statistics on Trading Performance

While your bottom line (total profit or loss) can readily tell you your overall trading success, keeping statistics is a wonderful method to figure out which components of your trading system are preventing you from performing like a well tuned race car rather than a junkyard clunker.

Your “performance stats” let you figure out what's working, what isn't, and where you might improve.

Here are some of the statistics you should keep at the very least to keep track of your system's vitals.

Profit after taxes

Your net profit is the difference between your total gain and your losses and expenses. Equipment costs, commissions, and other fees are included in these charges. In simple terms, this is the amount your account is up or down at any particular time, minus trading charges.

Percentage Win

The total number of wins divided by the total number of deals equals the win percentage. What percentage of trades do you win？

Percentage Loss

The total number of losses divided by the total number of deals equals the loss percentage. What percentage of transactions do you lose？

The Trade with the Most Winnings

Your most profitable deal will be excluded from the “average win” calculation.

This isn't required, but if you have an unusually large win in comparison to your last wins, removing it will give you a more accurate picture of your stats and expectations.

The Trade with the Biggest Loss

Your worst losing trade will be excluded from the computation of your “average loss.”

This isn't required, but if you have an unusually large loss in comparison to your last losses, removing it will give you a more accurate picture of your numbers and expectations.

Winning Trade Average

The average profit per winning trade is calculated by dividing the total profit from all of your winning transactions by the number of deals won.

Losing Trades on Average

Your total loss from all losing transactions divided by the total number of losing deals equals your average loss per losing trade.

Per-Trade Payoff Ratio

Your average winning transaction minus your average losing deal equals your payoff ratio per trade.

Average Trade Holding Time

Divide your total holding time for all of your trades by the number of trades to get the average holding time per trade.

Long Trades P/L vs. Short Trades P/L

This statistic can assist you figure out what kinds of deals or trading conditions you excel at.

Largest Number of Losses in a Row

This metric aids in establishing your maximum drawdown, or the worst-case scenario you've faced thus far.

The Average Number of Losses in a Row

This figure aids in calculating your average drawdown and limiting your maximum risk.

Maximum Deduction

The highest drawdown is the worst phase of your trading system's “peak to valley” performance.

Expectancy in Trading

Expectancy is the average amount you can expect to win (or lose) per deal in basic terms.

By multiplying the loss % by the average loss and subtracting it from the victory percentage times the average win, this may be calculated. This statistic aids in determining the appropriate position size and the profitability of your trading strategy.

Keeping Track of Your Feelings and Mistakes

Although your mental state cannot be monitored as a “statistic,” you should keep track of it regardless.

Keeping track of your emotions will help you avoid trading at those difficult times, such as when you wake up soon after a news event (that you forgot about) that sends the markets soaring, prompting you to try to chase it.

However, your computer crashes, you lose electricity, and your dog bolts out the front door into oncoming traffic.

When you return to the computer, you notice that the market has moved 100 pips in the direction you planned to buy. Isn't it annoying when that happens？

Trading for the remainder of the day may be a bad choice because you're probably not in a good mood.

You should maintain track of these statistics in order to compare and analyze your performance over time.

Huck, for example, publishes her year-end trading assessment at the end of the year.

After reviewing her trades, she discovered that she had been unwittingly trading against the trend!

Knowing this, she can adapt her trade to avoid trading against the trend, which should result in improved trading results.

The purpose of gathering and calculating these statistics should be to identify ways to increase your expectation (pips or dollars gained each trade), select the proper position size per trade, and determine the ideal trading circumstances for YOU!