TechPally hints Stock Trader on Keeping Stats for Recurrent Profits

In every stock market, commodity or futures trading, there's always behavioral patterns of investors towards financial instruments.

Disregarding markets news, company results, industrial news, etc, there are specific ways investors respond to price at some time.

This behavior is usually repeated, therefore, keeping a trading diary is important to have recurrent trade wins.

Because the more detailed you keep records, the more precisely you will know about your results and statistics.

 

Basic Data to Keep as A Trader

So what should you keep in records to get profitable insights?

These are the four most important statistics for your trading documentation.

 

·         Major Price Band

The "usual" range of price fluctuation in your trading instruments.

Your performance is unlikely to show from the lower-left corner of the chart to the upper right corner as drawn with the ruler.

There are technical tools than can help you to easily spot the major price swings.

 

·         Win to Loss trade Ratio

The proportion of your winning trades concerning your losing trades

How many of your transactions do you close with a profit? And how often do you see a minus?

For example, if you have closed 45% of your trades with a profit in the past, you should perform an analysis when this means (considering a sufficiently high number of trades) drops to 35%.

Are you using a strategy that targets chart breakouts while the market is moving sideways?

Then you may not have any reason to be concerned.

The stock market is simply in a phase that is unfavorable for your strategy.

However, if it doesn't, then you can investigate whether you might have done something differently, then you did before.

You may be taking greater risks without realizing or do too many transactions

Every insight you gain is another milestone on the way to trading success.

 

·         Study your Trading Strategies

 As a seasoned investor, you may even know the normal fluctuation range and a maximum drawdown of your portfolio.

You should keep track of the trades that got you much wins and loss as well.

If you have seen a larger decrease in capital, you should try to find out the reason for the discrepancy.

Why are your losses greater than they used to be? Are the exchanges generally more volatile than usual (such as 2008/09) or does it have to do with your trades? Which details have changed?

Even if your winnings are higher than you expected, this is another thing to check.

Have you changed something about your trading method?

For example, have you become pickier about your trades or is there a favorable time zone or season on the stock market?

The better you can assess what constitutes your trading success or failure, the easier it is for you to use this knowledge to your advantage.

 

·         Study the Average profit/loss of your positions

For example, you meet someone on a birthday and they tell you that they made 70% of their trades with a profit.

 

Of course, what he doesn't tell you is that the losses of the remaining 30% are greater than the sum of his gains.

It is also important for you to know what the average profits and losses of your transactions are.

Because these values tell you how well you are sticking to your risk management.

 Are you consistently sticking to your stop-loss orders and your profit targets? be sincere and answer yourself.

Are you critical and selective enough in choosing your trades?

If your average losses are always higher than your winnings, is your trading strategy profitable?

You may be taking too much risk in your positions to your profit targets and should therefore adjust your stop-loss levels or profit targets.

You will see how your performance changes if you turn different screws.

If your approach is right, you can understand this from the fact that you earn significantly more money per trade than before.

You're doing something much better than before.

Define exactly which changes have led to the improvement in results.

A good tip is usually to be more selective because a lower number of transactions usually increase the average profit/loss ratio noticeably, TechPally advised.

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  Asset class performance

Many beginners prefer to invest in stocks for dividends, and not for price gain.

After a while, this becomes too boring for some and they consider trading stocks, maybe daily or weekly.

They can also invest in other investment commodities.

Anyone who then trades in confusion, for example with options, futures, CFDs, or currencies (Forex), loses track of the performance of the different asset classes quickly.

 

Most traders know the overall performance of a trading day very well because the deposit value is usually displayed directly in the dashboard

What is not shown is how this result came about.

The performance per asset class should therefore be analyzed at least once a quarter, TechPally boss

For example, if you made + 10% on stocks and lost 25% on options and futures, then you should focus on trading stocks first.

At least until you have analyzed your options and futures trading for possible errors and causes.

When trading, always focus on what works in the long term, TechPally business expert advised.