Evaluating your trading - Page 206
Page 206 of 207 FirstFirst ... 106156196202203204205206207 LastLast
Results 2,051 to 2,060 of 2062

Thread: Evaluating your trading

  1. #1
    Educator
    Join Date
    Jun 2013
    Posts
    1,105
    Promo (¢)
    15
    Thumbs Up
    Received: 579
    Given: 191

    Evaluating your trading

    Hi everyone!

    Question that every trader asks himself from time to time can sound like this – «Is my trading good»? In other words, is it robust, does it have the edge, will it be profitable in a long run?

    Some naïve beginner traders say – «it’s very simple, if you earn money, your trading is good, if you lose money, your trading is bad». But it’s not that easy in a world of real trading – good trading does not necessarily correlate with short-term profits, bad trading does not bring profits in short-term perspective.
    Can you tell me – is this trading good or not if I show you distribution of profits/losses in picture below?

    Attachment 10031

    Of course, you may try to analyze this account statement and notice that 906 USD loss was accompanied by increased lot size, also you may notice series of profits (436, 703 and 575 USD), but you know what?

    We never know whether this trading is good or not if we don’t know whether these series of profits was a result of following trading plan or veering from it?
    So, here we come to basic principle of trading – short-term results don’t matter too much, they can be result of luck. Think about it – best trading systems are not providing profit all the time, worst trading systems are not providing losses always.

    Ok, but what if you don’t have rigid trading rules for entering and exiting positions? It’s reality for discretionary traders who use their judgement for making trading decisions.

    Is it really impossible to evaluate your trading using your profits/losses distribution?

    To answer this question, let’s divide trading styles on 2 parts:

    1. Trend-following trading approach:

    In this trading approach, trader expects to have small frequency of winning trades, but his profits are much greater than average loss. For example, it’s ok for trader to have 6-7 or more consecutive losses, then to cover it with 2 trades. His equity curve will look like shown below:

    Attachment 10032

    You see, that in this case trader has relatively small number of winning trades (maybe less than 30%), but he successfully covers his losses with 1-2 «home runs» (big swings). You see, in this trading style it’s not recommended to evaluate trading by short-term profit and we need more time to make conclusion – is this trading approach robust or not.

    2. Short-term trading:

    By short-term trading, I assume that one can either day trade or hold position overnight but still have small duration of average trade (1-2 days). Of course, the less duration of trade we have, the less is our average profit per trade. Yet In this example, we can expect to have better frequency of winning trades. And correlation between good trading and immediate results is much better for short-term trading rather than for trend-following trading or other long term trading styles.

    Equity curve in this case will look like this:

    Attachment 10033

    You see, here we can have about 50/50 distribution – in every second trade we can get profit or at least achieve breakeven point. Why not 70/30 or 80/20?
    That’s a dream of every trader – to have 80% of winning trades and also keep profit/loss ratio more than 2/1 (having average profit greater than average loss).

    But there are no hidden hacks and shortcuts in trading – if we improve our frequency (quantity of winning trades), we lose magnitude (size of our profit becomes smaller). Some traders are proud that they have almost no losses or 95% of winning trades, but size of their possible loss can destroy entire account. Market is hardly predictable in short-term perspective. I personally don’t think that we should chase for high frequency of winning trades. If I will be able to get 50% of winning trades and keep 3/1 profit/loss ratio, I would be in hog heaven.

    In short-term trading approach it's much easier to evaluate your trading by short-term results - the better you trade, the more winning trades you will have and vice versa. That's why personally, I prefer short-term trading approach, because I can keep myself on track and quickly reconginize that my trading has become defensive, too aggressive e t.c.

    Starting from September 2013, my own track record of results is shown below (Every week I put down result in pips in special Excel file):

    Attachment 10034

    You see, my profitable weeks are almost equal to losing ones - I don't have "home runs" except one trade on XAGUSD (Silver). But frequency of winning weeks (I had 2 times greater number of winning vs losing weeks) allows me to survive in the long run (and to get profit) without "killing trades". And, what is even more valuable, I can quickly recongnize when I'm trading poorly and correct my trading behavior.

    Good luck!

    Not allowed!
    Last edited by Value trader; 04-21-2014 at 07:13 AM.

  2. #2051
    Registered user
    Join Date
    Aug 2015
    Posts
    12,806
    Promo (¢)
    5,595
    Thumbs Up
    Received: 122
    Given: 24
    Quote Originally Posted by mexima View Post
    well analysis never be fixed like you can do analysis on same pattern . market always try to trap the trader but moving violatly how ever experience trader always trap the market because they know how market will try to trap us so they take more entry with different type of analysis and then make the profit on the losing trades.
    but market some time repeat its pattern cannot all time but some time it done, so i think we should control on self and should trade with some proper analysis, if we are doing candle pattern keep in mind candle pattern can change its working with time and market situation, no matter what technical you are using but if you are short term must keep an eye on data news as well, its most important factor for short term traders

    Not allowed!

  3. #2052
    Registered user
    Join Date
    Oct 2018
    Posts
    2,376
    Promo (¢)
    6,090
    Thumbs Up
    Received: 10
    Given: 7
    Quote Originally Posted by naeem555 View Post
    but market some time repeat its pattern cannot all time but some time it done, so i think we should control on self and should trade with some proper analysis, if we are doing candle pattern keep in mind candle pattern can change its working with time and market situation, no matter what technical you are using but if you are short term must keep an eye on data news as well, its most important factor for short term traders
    i also donot like candle pattern because i believe for trading we need to use real ways where we become successful but when we try some candle pattern these do not have any solid reasons, market won't work on candle patterns some time market can move on them by chance but for every time good orders i think we should trade on technical it have reasons and tools to understand not candle pattern have

    Not allowed!

  4. #2053
    Registered user Toyen's Avatar
    Join Date
    Apr 2018
    Posts
    7,489
    Promo (¢)
    7,965
    Thumbs Up
    Received: 39
    Given: 13
    Quote Originally Posted by naeem555 View Post
    but market some time repeat its pattern cannot all time but some time it done, so i think we should control on self and should trade with some proper analysis, if we are doing candle pattern keep in mind candle pattern can change its working with time and market situation, no matter what technical you are using but if you are short term must keep an eye on data news as well, its most important factor for short term traders
    It is most times that the market is repeating its pattern, this is not what traders have to be watchful about. What i know is that traders have to get ready for the way the market is moving, and the traders will need to have their own trading system which will always trade the market rightly. That is what i know that we need, and when we have not gotten the trading system yet, more training will let it get done easily for us.

    Not allowed!

  5. #2054
    Rookie
    Join Date
    Feb 2014
    Posts
    2,488
    Promo (¢)
    2,960
    Thumbs Up
    Received: 11
    Given: 9
    the processes of evaluating can be very powerful and this may be very good at the times of mistakes which may lead to big losses . this can be a chance foir the trader to re calculate his own arrangements and what made the trades losts . and also this will be very good to follow at the times of no trading in order to know about the real mistakes reasons .

    Not allowed!

  6. #2055
    Registered user
    Join Date
    Aug 2014
    Posts
    6,466
    Promo (¢)
    1,140
    Thumbs Up
    Received: 56
    Given: 35
    Quote Originally Posted by Toyen View Post
    It is most times that the market is repeating its pattern, this is not what traders have to be watchful about. What i know is that traders have to get ready for the way the market is moving, and the traders will need to have their own trading system which will always trade the market rightly. That is what i know that we need, and when we have not gotten the trading system yet, more training will let it get done easily for us.
    We have to watch the charts and based on our strategy try to grab a potentially good move that the market is about to make. We have to evaluate the results we achieve from our strategies or system on a regular basis and that is how we come to know of the right course of action to improve. The main function of evaluation is to enhance our trading quality.

    Not allowed!

  7. #2056
    Registered user Sascha's Avatar
    Join Date
    Dec 2013
    Location
    Racoon City
    Posts
    3,563
    Promo (¢)
    1,125
    Thumbs Up
    Received: 64
    Given: 56
    Quote Originally Posted by AmitChallenger View Post
    We have to watch the charts and based on our strategy try to grab a potentially good move that the market is about to make. We have to evaluate the results we achieve from our strategies or system on a regular basis and that is how we come to know of the right course of action to improve. The main function of evaluation is to enhance our trading quality.
    spend at least 30 minutes to monitor market to see if the movement is interesting to trade with or not. with our experience, we can see how market moves to various volatility by making few minutes observation as it doesn't take longer to hours to do that. later we can decide what to do next and use our time to create some plans regarding to market. i'm thinking that evaluation helps traders to find out what they've done in past with mistakes and find the solutions for them.

    Not allowed!

  8. #2057
    Registered user
    Join Date
    Oct 2017
    Posts
    5,090
    Promo (¢)
    900
    Thumbs Up
    Received: 44
    Given: 55
    Once you understand the market, you will see the importance why it is needed for every one to get to make evaluation every now and then, because you don't make improvement when you have ignored to see the reason why you should improve, most of us don't want to be reminded of our mistakes made when trading, but then again, if we can accept those mistakes then we can look for remedy for it.

    Not allowed!

  9. #2058
    Registered user
    Join Date
    Nov 2017
    Posts
    7,129
    Promo (¢)
    1,815
    Thumbs Up
    Received: 35
    Given: 68
    A good trader knows how to make good evaluation. Knowing that the aspect of making evaluation will get to bring the best in them and then make them see the way the market works, trades who don't make evaluation will get to keep on making the same mistakes over and over again, but when you make evaluation, you will know the cause of your past mistakes and then put them to corrections.

    Not allowed!

  10. #2059
    Registered user ola4real's Avatar
    Join Date
    Mar 2018
    Posts
    8,134
    Promo (¢)
    7,320
    Thumbs Up
    Received: 47
    Given: 20
    Quote Originally Posted by Striker$ View Post
    Once you understand the market, you will see the importance why it is needed for every one to get to make evaluation every now and then, because you don't make improvement when you have ignored to see the reason why you should improve, most of us don't want to be reminded of our mistakes made when trading, but then again, if we can accept those mistakes then we can look for remedy for it.
    You you have to know that evaluation is a good thing for trading, the forex traders who are evaluating their forex work correctly will always get to gain with what they are doing. Evaluation will go a long way in making traders to trade with an improved skills like you have said too, that is what i know that will not let forex traders to be trading like the gamblers who are calling themselves forex traders.

    Not allowed!

  11. #2060
    Registered user Azis Muslim's Avatar
    Join Date
    Sep 2013
    Posts
    5,483
    Promo (¢)
    1,200
    Thumbs Up
    Received: 278
    Given: 190
    Quote Originally Posted by ola4real View Post
    You you have to know that evaluation is a good thing for trading, the forex traders who are evaluating their forex work correctly will always get to gain with what they are doing. Evaluation will go a long way in making traders to trade with an improved skills like you have said too, that is what i know that will not let forex traders to be trading like the gamblers who are calling themselves forex traders.
    Evaluation usually done by traders after we finish our trading and get our result in loss or profit. Unfortunately most of times traders who won their trades will not doing this evaluation and continue to make their next trade instead. Logically by traders they are thinking that evaluation is necessary only when they are making mistakes and need to correct things. However it is not the only purpose of making evaluation in this business.

    Not allowed!

Page 206 of 207 FirstFirst ... 106156196202203204205206207 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •