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DeefMan

Best stats for tracking progress?

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What are some of the better stats to track for day trading futures/e-mini's?

 

Here's some that I've been using:

Daily/weekly profit/loss (after commissions)

win/loss ratio

daily/weekly net tick gain/loss

daily/weekly total trades

max daily winner tick gain.

 

Here's a stat that they use in pristine e-mini chat room:

Sharpe ratio (modified) = daily avg gain/avg loss

They recommended a goal of around 50% win/loss ratio, and around 1.47 sharpe ratio.

 

Recently I've been using a daily goal of 25 to 50 net tick gain per day, 5 to 15 trades per day, 60% win/loss ratio. That has generally worked well with my trading style.

 

However sometimes due to tracking stats, I've gotten focused too much on the keeping good daily stats and possibly missing out on proper execution, and/or a good setup near the end of the day.

 

Any ideas on what other stats to track that might better keep the mental focus on proper execution, and provide the best way to track progress?

 

I've seen some traders' excel spreadsheets where they track each and every single trade, with specific details of the setup/entry/exit/etc. However I haven't refined my trading strategies and setups enough to do that sort of record keeping.

 

Anyone using R's with day-trading futures? I know tracking R is popular with those dummy type opening gap stock day trade setups.

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I dont rate by dollars at all.

 

I rate every trade with 3 numbers (1 is a break of my rules, 2 is slightly faulty, 3 is as it should be). The first number is for the entry. The second for the stop. The third for managed exit.

 

So a great trade is 333. A very bad trade has a 1 in it.

 

Anything to do with money takes your focus away from where it should be. Use money measures for weekly reviews etc (IMHO)

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kiwi, that's a very effective way of keeping tracking of your trades! I like very much. I might just use that, simple but great way to rate execution and discinpline.

 

deefman, I usually write my notes of the trade on my chart then after the trades are done, i note elsewhere, that way I do it without taking my eyes off my charts. I usually write my plans/setups before the day started so I'm already prepared with notes. Doing this after a while, the note-taking goes very quickly without missing setups.

 

Since you don't have a particular strategy or setup just yet, might want to number them like kiwi says, each strategy with a numbering system so you can quickly note them without losing too much focus on trading.

 

kiwi is absolutely right about dollar counting, I have removed all P/Ls columns from my platform. Measuring this will affect your performance tremendously, especially when you increase size. I don't even look at it until the end of the day sometimes. Only when I do weekly reviews I open them up. Using points is more effective. I used to use Rs, which is similar to setting targets but realized the market doesn't know where your Rs are. I usually measure my stop loss and target and quickly calcuate the R:R (Reward:Risk) if it's high enough to take the trade. Then it's really up to the market to take me to my target. If you can calcuate R:R before every trade, your stats usually stay constant since you'll eventually know how much you'll use and how much you're expecting to gain, if it goes your way. Doing this percentage will reveal your performance fairly quickly.

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Kiwi, I love it! The one thing I've been trying to make myself do is concentrate solely on the setups and making those as perfect as they can be, and then believing that the money will come along later. I completely agree with grading the setups and looking at you P/L later on down the road (weekly).

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The Well Planned Trade

 

It's not whether you win or lose but how you play the game. This old adage is especially relevant to trading. Many novice traders assume that winning is the only thing that matters, but what they soon find out is that profiting over the long-term requires discipline and trading well developed trading plans. Sure, you can capitalize on chance and make a few winning trades here and there, but you can only win in the long run by developing a trading plan and following it.

 

 

It is important to distinguish justified wins from unjustified wins. A justified win is when a trader makes a very detailed trading plan and follows the plan. A win that results from following a trading plan is justified and reinforces discipline. An unjustified win occurs when a trader doesn't make a plan or drifts from the plan. He or she may be rewarded, but the outcome occurred by chance. The win is unjustified and can reinforce undisciplined trading.

 

For example, suppose you go long on a stock, expecting it to go up $1, but it went down. If you followed your plan, you might close the trade. Suppose out of frustration, though, you hold out and hope against hope that the trade will turn around. Now suppose that it does, and you end up profiting. You have ended up with a profit, but you may have reinforced an impulsive trading style.

 

You might think that profits are all that matter. "All is well that ends well," right? Well, maybe not. You may make a big profit, but at what psychological cost? Unexpected wins may provide short-term pleasure, but they can adversely influence discipline in the long term. Rather than developing a well-defined trading plan, following it, and getting rewarded by trading it, a trader puts on a trade haphazardly and is coincidently rewarded. In this case, a lack of discipline is rewarded, and this unjustified reward may increase a trader's tendency to abandon trading plans in the future because he or she has been rewarded for doing so in the past. However, the positive outcomes are usually short-lived, and a lack of discipline ultimately produces trading losses.

 

Cultivating discipline is vital for consistent and profitable trading. One implements proven trading strategies, over and over, so that across a series of trades, the strategies work enough to produce an overall profit. It's like making shot after shot on the basketball court so as to accumulate a winning number of points. The more shots you take, the more likely you will amass points. But the winning player is the person who first develops the skill to make the shot consistently, so that at every possible opportunity, the ball is likely to go through the basket. To a great extent, consistency is key. If the player uses one approach one time, and a different approach at another time, performance is haphazard. It's the same for trading. One must trade consistently, following a specific trading plan on each and every single trade. This allows the law of averages to work in your favor, so that across the series of trades, you will make an overall profit. If you follow the plan sometimes and abandon it at other times, you throw off the probabilities. Suppose you used a strategy that had a track record of 80%. Under the best-case scenario, you could only expect to win 80% of the time. But since history doesn't always repeat itself, it's likely that you will win less than 80% of the time. If you don't execute the trading strategy the same way each time, you will decrease your winning odds. And fewer winning trades may mean an overall loss. That's why discipline is so important.

 

With discipline comes profitability. Don't let unjustified wins interfere with your ability to maintain discipline. Follow your trading plan, and reinforce the idea that if you follow your plan, you will end up with profits in the long run. If you abandon your trading plan, and get an unjustified win, you may feel good in the short term, but you'll pay a long term price when it comes to your ability to maintain discipline. So clearly define your trades, and stick with your trading plan. The justified wins you receive from following your plan with help you develop an unwavering pattern of disciplined trading.

from Innerworth.com

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Excellent post Kiwi, covering perhaps one of the most important aspects in trading!

 

The gratification I receive on a planned out trade far exceeds a winning impulsive trade. Designing a trading plan and following is a must. A trader with a trading plan can get into the sniper mode of waiting for that killer trade. A trader without a plan will end up overtrading following absolutely no setups. A plan keeps emotions in check. It is a clear roadmap and I could never trade without one. The times I lose are times when I didnt spend enough times designing my trading plan.

 

I am fortunate enough to have learned strict discpline through my long years as a poker player. Similar to trading, there are so many possibilities in poker. You need to be prepared for all the possibilities and play your hands accordingly. Play tight but aggressive. Sometimes you have to lay down or fold a good looking hand. Even the best looking setups might have to pass in trading if internals are acting weak. Intuition in trading allows one to filter out the good setups from the bad. This creates further discipline in my opinion.

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Excellent post, kiwi! It cannot be any clearer than that.

 

I think positive and negative reinforcement is a MAJOR factor in shaping trading behavior and many traders are not aware of it. Mixed signals with mixed rewards can produce a child with confused and insecure upbringing, he'll wander aimlessly not knowing what is the correct behavior to merge in with society. But a child with discipline has a clearly defined role and duties that secure his actions to do the right thing and possibly successful things in the long run.

 

In the end, with mixed rewards the trader doesn't know if it's him or it's his trading system that's the problem. Creating a trading plan and rating it help identify and root out the cause of the problem. It's the only way to move forward.

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The Well Planned Trade

 

It's not whether you win or lose but how you play the game. This old adage is especially relevant to trading. Many novice traders assume that winning is the only thing that matters, but what they soon find out is that profiting over the long-term requires discipline and trading well developed trading plans. Sure, you can capitalize on chance and make a few winning trades here and there, but you can only win in the long run by developing a trading plan and following it.

 

Ditto. Some very good points, well presented. Especially those highlighting the psychological & discipline measures!

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