Analyzing your Trading Stats

30 Jun Analyzing your Trading Stats

#trad­ing­forex #forex #trad­ingjour­nal #day­trad­ing #trad­inglifestyle #day­trader­life #track­y­ourstats #trad­ingstats

So you’ve been trad­ing for a while. How do you know what to look for? How do you know what you are doing right and wrong? Which set­up works best? What time of day works best? How long do I let win­ners and losers run? How much is my expectan­cy? What is my risk to reward ratio? In oth­er words: how much mon­ey am I putting on the line to make how much? Just by look­ing at these stats you will get real insight into your strengths and weak­ness­es. Do not over­look this. Do not be one of those peo­ple that just trade and trade and trade but nev­er review and won­der where they went wrong. You need to know what to improve upon. 

Why now?

It is the last day of June. Both assets that I cur­rent­ly trade (GBPNZD and Gold XAUUSD) are bal­anc­ing today (at least at the time I wrote this) so decid­ed not to trade. This and try­ing to pre­serve my win­nings for the month. If you are work­ing for a prop firm it is impor­tant to keep win­nings at the end of the month. No win­nings? No pay­out. There are no nor­mal salaries giv­en at a prop firm. So I decid­ed to have a look at my cur­rent stats. Com­pare them to my pre­vi­ous stats. Per­haps I can get a bet­ter under­stand­ing of my own trad­ing. As well as find points that I should work to improve. Spoil­er alert. I will!

Thank you for fol­low­ing my progress

First off. For those of you that have been fol­low­ing my jour­ney I’d like to give a big thank you! I know I haven’t been blog­ging much. Although almost every­day I upload trad­ing plans and a Dai­ly Report Card. I sin­cere­ly hope my jour­ney some­how adds to your own. Fur­ther­more, you should know by now that I’m quite seri­ous about this. I try not to half-ass this although I still make many mis­takes. Which is per­fect­ly fine. Try. Fail. Review. Try again and repeat till infin­i­ty! What works now, might not work lat­er. So it’s this process that will keep you in the run­ning. If con­tin­u­ous learn­ing excites you?! You’ve found the right path in trading.

Quick shoutout to Dee

Most of you that fol­low me know that I am being men­tored by Deeyana Ange­lo from Mar­ket Stalk­ers. I am a Gold mem­ber and have been so since the begin­ning of May. I am in the process of writ­ing an arti­cle on my men­tor­ing. How­ev­er, I want to put it in a for­mat that you can learn from. Stay tuned. It will come. If there are any ques­tions you’d like answered please let me know by either con­tact­ing me direct­ly or post­ing in the com­ment sec­tion below. For now, I’ll leave you with this: I can hon­est­ly say that it was the sin­gle best deci­sion I ever made regard­ing my trading.

Are we gonna get to the ana­lyz­ing stats part?

Yes yes here we go. I use Edge­wonk for my trade jour­nal­ing but the prin­ci­ples apply to what­ev­er it is you’re using. Spread­sheets or what­ev­er. So where to start? First, let’s get some ter­mi­nol­o­gy out of the way so that we actu­al­ly have an under­stand­ing of what we are talk­ing about. For now we’ll be focussing on the following:

• Aver­age RRR planned
  • This met­ric mea­sures the dis­tance between the entry and your stop (poten­tial risk) and com­pares it to the dis­tance between the entry and the tar­get order (poten­tial reward). The ratio of those two num­bers, poten­tial risk and poten­tial reward, is called the Reward:Risk Ratio and it’s an impor­tant met­ric. Ide­al­ly, you should have a high­er prof­it than risk. I will even go so far as to say that this is a MUST. When you aim for 2:1R you only need to be right like 36% of the time. Put your ego aside and play the statistics.
• Aver­age R‑multiple
  • The R‑Multiple is sim­i­lar to the RRR planned but the R‑Multiple mea­sures the final out­come of your trade. The ‘R’ stands for Risk. For exam­ple, a trade where the orig­i­nal stop loss got hit has an R‑Multiple of ‑1. A trade where you closed the trade halfway to your stop loss has an R‑Multiple of ‑0.5. A win­ning trade where the tar­get was twice the size of the stop loss has an R‑Multiple of +2.
• Prof­it factor
  • The Prof­it Fac­tor com­pares the aver­age los­ing and win­ning trade and builds a ratio. For exam­ple, if your win­ning trade is on aver­age $100 and your aver­age los­er is $50, your Prof­it Fac­tor is 2 ($100 / $50).
• Avg Win­ner / Los­er performance
  • This is the aver­age return fig­ure for win­ning and los­ing trades in percentage

For more infor­ma­tion on what Edge­wonk can track for you please vis­it https://edgewonk.com/

Edge­wonk is a local trad­ing jour­nal soft­ware that I high­ly recommend. 

Let’s get to some of my own stats

In all open­ness these are my cur­rent stats trad­ing a new account that I start­ed 2nd week of June (June 8th) till now June 30th. So it’s fair to say that this does not rep­re­sent the com­plete real­i­ty of my trad­ing. I will need upwards of 50, prefer­ably 200+ trades to have a more real­is­tic data set to cal­cu­late stats. How­ev­er, I will com­pare this to my stats from the month before. As we go along (yes I’m tak­ing you with me on my jour­ney) I will update you on my devel­op­ment. Here they are for now:

Met­rics	June (6/8–6/30	May (5/4–6/3)
Total trades	18	21
Win­ners	8	9
Losers	3	11
Win­rate (%)	72.73	45
Aver­age RRR planned	2.02	1.64
Aver­age R‑multiple	0.37	-0.09
Prof­it factor	5.46	0.73
Avg. Win­ner Per­for­mance % of account	0.66	0.69
Avg. Los­er Per­for­mance % of account	-0.4	-0.77
Avg. Hold­ing Time (min­utes) Winners	146.75	102.33
Avg. Hold­ing Time (min­utes) Losers	53.67	74.75
Up for the month in %	5.29	-2.32

Things to consider

If you have been fol­low­ing my Dai­ly Report Cards you might have noticed that my cur­rent week­ly goal is to get siz­ing right! I am still learn­ing how to do this man­u­al­ly. Need­less to say that I am mess­ing this up from time to time. This is also why I have 18 total trades but only 8 win­ners and 3 losers. For the genius math­e­mati­cians amongst us 🙂 that means there are 7 trades ‘miss­ing’. This is due to me siz­ing wrong and then adding to or get­ting rid of some of my posi­tion. I con­sid­er these as 1 trade. In total I made 5 of these mis­takes. This is just an indi­ca­tion on how I pro­gressed as opposed to the month before. 

Speak­ing of the month before. This is also not quite the fair com­par­i­son. The month pri­or my account was too smal to con­stant­ly trade in a way every asset would rep­re­sent 1% risk of my account. In order to have ‘clean­er’ stats it is imper­a­tive to risk a fixed amount. Because my account was too small I was unable to always risk 1%. So I start­ed a new account in June. This will be my bench­mark for the months to come. The begin­ning of a larg­er sam­ple size to mea­sure the expectan­cy of my edge.

To sum things up

Sure, I can boast about my high win rate com­bined with a high prof­it fac­tor. But I’m not going to do that since it is some­what irrel­e­vant. 1. I don’t have enough trades as point­ed out before. 2. It is the first month that I ‘some­what’ got siz­ing right. 3. AGAIN, I NEED MORE TRADES! So… My aver­age win­ner is 0.66% of my account where my aver­age los­er is ‑0.40%. Ide­al­ly my aver­age win­ners would be clos­er to 2% but we do not live in a per­fect world. See what I did there. I blamed THE WORLD! It’s the world’s fault I am not dri­ving a Lam­bo! DAMN YOU WORLD! OK…. Get­ting tired and thus annoy­ing 🙂 Now that I got that out of my system. 

I know that when I keep focus­ing on good setups plus get­ting bet­ter at hold­ing and let­ting exit rules play out, I will increase my aver­age win­ners. When com­pared to the pre­vi­ous month I can say that I have been more picky about my trades. Trad­ing less for more. One facotr for that is that I have increased my hold time on win­ners. This aside, my main point for improve­ment is still siz­ing. I will con­tin­ue to aim to get this right so that my 2R tar­gets are actu­al­ly a 2% increase of my account. So that over­all I can get clos­er to that aver­age 2R win. Obvi­ous­ly trades don’t always pan out and you are left with less than 2R. Only way to find out is to keep con­tin­u­ing this tra­jec­to­ry that I am on and build on the sam­ple size. This will give me a more accu­rate esti­mate of how well defined my edge real­ly is. 

If you have made it all the way through… Here is a FREE LAMBO!!! 

Sor­ry no Lam­bo. Nonethe­less, I great­ly appre­ci­ate your inter­est in my jour­ney. I’m sure it is not an easy read. If you have any com­ments or sug­ges­tions feel free to let me know. Even though I do like writ­ing I don’t con­sid­er myself to be much of a writer. I rather talk or play online games 🙂 Reach out to me. Let’s hang. Talk. Per­haps some Call of Duty Mod­ern War­fare or some Sim Rac­ing? Let’s team up. Con­tact me for my Dis­cord chan­nel details.