Posts: 1,036 since May 2012
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Personally I keep track of quite a few metrics but if I was forced to just use one, it would be expectancy (and by extension of that: winning %, losing %, avg win size, avg loss size). What I like about expectancy is that it not only tells you if you will be profitable over the long term ie: expectancy, but it also allows you to analyse where your profits are actually coming from. Are they coming from the fact that you are able to be right a high percentage of the time? Or are they coming from the fact that when you win, you win big. Or is it a mix between the two? All useful information bundled up in one metric.
Obviously things like MFE and MAE are also interesting. But in my opinion these are for fine tuning an already profitable trader's performance.
@deaddog also makes a good point about tracking the emotional aspects of your daily trading. This is an area that allows for a bit more creativity because you will need to pick up on psychological issues that may be affecting your trading and figure out ways to track them. For me, I track the following every day:- Was my daily routine followed
- Did I take every valid signal
- What was my level of focus as a percentage
- Did I let the result of prior trades affect my next trade
- Did I follow my entry rules
- Did I follow my trade management rules
I enter all of that into my spreadsheet and it calculates a percentage which I call my emotional performance percentage.
Good luck.
Diversification is the only free lunch |
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