If you are not at a hedge fund or proprietary trading firm (and in some cases even if you are), you might not really know your own trading. It’s quite easy to look at an equity curve and think that it all you really need to know.
In reality however there is a lot more data (and potential insight) behind the scenes. Do you have certain days or times of day when you tend to trade better? Are you good at event (news) trading or not? What’s your optimal hold time (or in other words, how much patience and other resources do you have to let a trade develop)? What’s your average winner and what’s your average loser? What was your best trade and what was your worst in each of the last three months?
… and I am just getting started.
Behind the scenes of an equity curve are patterns that create that curve. It takes time and energy to find them if someone is not handing a report to you. (Even bank traders I coach don’t necessarily get these kinds of reports!)
Depending on your personality tendencies you might be surprised that 1) you actually do better than you think (!!!) or 2) sadly, you do worse. Perfectionists, highly responsible and high anxiety types tends to be in category one and it’s a relief to find out that really, their results stemmed from one bad decision.
In this beginning of the end of summer, it might be a good time to take the time to go behind the scenes of your bottom line. There is almost no way the insight gained won’t make a positive contribution to your year-end results!
(BTW – While you are here, sign up for Tips & Tricks – in our next newsletter, we will talk some about interpreting the results of what you find).