Assess your Trading Performance and Enhance your Future Trades

 In Trading

What is your opinion of yourself as a trader, and how would you evaluate your trading abilities? Is it good, is it bad? What’s the benchmark by which you may assess your overall trading progress? 

In most cases, we assess performance based on how much money we’re bringing in each day, week or month. Trading is absolutely pointless if the goal isn’t to make money. In regards to offering you valuable suggestions on how and where to improve however, profit is one of many benchmarks we can us to assess our performance.

As much as you would like to believe the stats, P&L figures on your balance sheet may be alluring but they do not tell you much about exactly, which areas you need improvement. We’ve all had a crappy week, month, or year. Scores in numerous areas can help you identify your strengths, as well as your weaknesses. Herein lies the key to making meaningful progress in improving your profitability.

For this reason, we present you with some essential metrics you can use in your trading journal which will help you understand your trading performance from a statistical and completely unbiased perspective. 

Incorporating these into your trading records may feel like a hassle but in reality they are remarkably straightforward and they may offer a better sense of pride and accomplishment, especially during stressful periods when profit margins are depressingly low.

Win/loss ratio of trades.

Having a solid understanding of your trades’ success rate [won or lost] will help you keep tabs on your progress in other facets of your trading career. 

Concerning this point, there is a consensus that perhaps you should win more trades often than lose – though there are still numerous thriving traders who endure high quantities of minor losses and fewer more profitable ones to maximise their earning potential.

Your average win/loss ratio must somehow be taken into account when calculating this statistic!

Your best bet would be to consider the 2:1 risk-ratio principle as a ‘purpose’ rather than being conditioned to ‘rule’.

Consecutive Win and Lose Streaks

If you analyse past experiences, you’ll be able to examine when these events occurred, what the actual market conditions were and the context at the time of the trade.

As a result, you’ll be able to see which markets you’re proficient at trading and which ones you should probably avoid for profits sake. Are there safeguards to protect oneself from the adverse market dynamics while still reaping the perks of good market conditions?

By proceeding this way, not only are you forming a sense of discipline, but you are also opening the door to a new level of confidence in approaching future trades.

Monitoring the Winning and Losing Trades

If you are among those holding on to trades for too long, this would be an eye-opener for you, as it will reveal some obvious information to determine whether or not you are the one who may be working against yourself in the course of profitable trades.

What are your habits when it comes to picking winners or holding on to failures in the hopes that they’ll turn out well later? If you can identify this, you’ll be better at considering when to exit your trades and when to hold. 

Trading Sessions 

This information might be beneficial for those who primarily trade at specific periods of the day. However, it’s not surprising for someone to make all of their money early in the morning sessions, only to squander it away later on.

Consider eliminating bad trading sessions, regardless of the time of day, and focusing on good ones to maximise your profits prospects.

Doing so makes you aware of the kind of trader you are, your trading strategy and how long you hold your trades, which informs you of your average holding times and the results!

Comfortable with Stake sizes

Every trader has a different comfort level. 

The size of the trading fund and unrealized losses aren’t necessarily indicators that you’re engaging in too much risk but that current negative figure could be the culprit. 

One sign that you struggle with your emotions is if your most profitable trades tend to be smaller.

We highly suggest keeping track of these five pieces of information and other necessary trading records to make an informed decision.

As long as you pay attention to these metrics, you should expect to see substantial improvements in your trading and if there are any uncertainties, these statistics will alert you to the need to take faster action.

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*US-Based Traders are subject to a fee, due to Regulation in the US (NFA/ CFTC), which denies the referral of any trader from certain finance related platforms.

Forex, Futures and Equities trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardising ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

CFTC Rule 4.41 – Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, because the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs, in general, are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.


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