One of my favorite quotes from quite possibly the most thought provoking books I have read in a while. Provocative for traders as well as life in general, if you haven’t read “The Slight Edge” by Jeff Olson, do yourself a favor and pick it up.
This quote resonated me as I was reviewing my trading stats for the week and reflecting on progress I had made in several areas. I am a firm believer of what gets measured has the ability to be altered, and analyzing your trading results is one of the biggest favors you can do as a trader starting out. I started doing this years ago and, now as a full time trader, it is that much more relevant to understanding where my opportunities lie and where I am strong.
Here is a snapshot of what I am talking about:
This was taken from analysis early in my trading career a few years ago as I worked to understand where my strengths were and where there were opportunities for me to improve (this was a monthly snapshot when I was trading part-time). A couple of thoughts were pretty glaring from this:
- Shorting clearly came easier to me
- I was much more adept at holding onto my shorts longer and/or adding to them appropriately
Thoughts on opportunities
- average size of win cannot equal average size of loss
- need to hone in on a more A+ setup, as clearly I was taking too many plays
- maybe I should just stick to shorts
🙂 That last point I was mildly serious on…Fast forward a few years and my win percentage for longs has improved to 72% and my average size of the long is much more in line to how I perform on the long side.
Slowing myself down to maintain a stat log provided such a learning opportunity. Without measuring, how do you know what needs to improve, right? If you aren’t tracking your progress and are new to trading, I would encourage you to do so. Reach out if you need help with building a log, happy to share mine with you.