We have talked a LOT over recent years about the importance of reviewing trade stats in GROUPS. And using this analysis to drive our growth and development.

This simple concept here:

<image: Improving Performance over the Next Quarter>

I still believe this is the best way to monitor the health of your business and to drive improvement.

Small groups, occurring regularly.

With the aim of achieving some degree of consistency across groups. And gradual, incremental improvement as we progress along the development pathway.

No, we’re not going to change this today. But perhaps we can add to the concept?

“Groups of Trades” is just one window through which we can view the health of our trading business. But there are other windows.

Like “Groups of Days” for example.

<image: Improving Performance over the Next Quarter>

<image: Improving Performance over the Next Quarter>

Or because we’re currently closing out one quarter and planning for the next, why not apply the idea to the whole prior quarter. 

<image: Improving Performance over the Next Quarter>

The stats work the same as before, simply replacing “trade” with “day”.

  • Win% = Number of Winning Days / Total number of Days * 100
  • Win/Loss Size Ratio (WLSR) = Average Winning Day profits / Average Losing Day loss

And feel free to review any other stats that may be of interest:

  • Largest Winning Day vs Largest Losing Day
  • Average Number of Trades on Winning Days vs Average Number of Trades on Losing Days

Take Action:

  • Gather your “daily” stats for the prior quarter.
  • Find the statistic which offers the best hope for improvement. The one offering the most potential for advancing you further along the development pathway.
  • Then dig deeper into the daily data to understand why you achieved this prior outcome.
  • And what changes you can implement to take your performance to the next level.

Go for it!

Happy trading,

Lance Beggs

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5 Comments

  1. Thanks Lance
    The like this article
    I use the free version of Tradevue as the paid one @ $30 in abit expensive for my liking.
    It is quite good though

    1. Hi Mitesh,

      I don’t trade cryptos. Futures only.

      The YTC PAT strategy can adapt to any market, provided it has sufficient liquidity and movement to ensure smooth price flow (ie. not gapping all over the place) and provided it has sufficient range of movement in price swings to allow for profit after costs.

      So crypto will be fine for many of the more liquid contracts. You’d likely be increasing timeframe though – be sure to scale all up. The central timeframe is the primary one you trade. The one degree higher for HTF structure and one lower for finer detail & execution.

  2. Hi Lance. I’m a swing trader, using your strategy of market structure, S/R, Swing H/L, solely on H4 for US30 and Nasdaq. So for a retest to take place on a key area while in direction of the main trend, I’d trade against the weakness if present from H4 or in multiple timeframes such as M30, H1 and H2(trading Timeframe).
    So for me, twenty trades is over a period of two to three months, depending on the Swing H/L TST. So I measure my performance over all trades executed in a month. That could be only be about eight to ten trades. So currently, my entries were bad compared to other previous months. Why ? Because I was not assessing strength vs weakness correctly, plus, I was using only M30 as my entry timeframe soon as I see one or two candles rejecting at a key area in the main direction. So, I figured that, I should rely on multiple timeframes to confirm strength vs weakness at a key area, so that will be on M30, then wait for H1 and H2 close. This is what I need to follow as part of my confirmation. US30 loves to test Swing Low in an uptrend, but also while testing, it has this tendency of a BOF which takes out all traders with buy limits. I’d also be taken out in those trades, but with a market execution after using just two M30 candles to confirm weakness. So, now I am still backtesting this multi timeframe confirmations. Maybe I might action this over market replay on tradingview, but I doubt it. I’ve done too much of that. My issue is just strength vs weakness confirmation upon a key area.

    1. Hi Tsholofetso,

      My preference is twenty as an absolute minimum. It’s an attempt to find balance between the need for a large enough sample to provide some degree of statistical significance and small enough to occur on a regular frequency.

      Detailed review of stats after 8-10 trades is certainly better than 2-3, but you need to accept that there will be greater potential for variance between group stats and longer-term stats than if you looked at samples of 20 or more.

      There will be periods of 8-10 trades where performance looks worse than normal, but it’s not necessarily an indication of a problem. Rather it may just be a period where conditions were less than favourable.

      Likewise there will be periods of 8-10 trades were performance appears exceptional, but that may not be an indication of sudden achievement of legend market-wizard status. Rather, it’s just exceptionally favourable conditions.

      Perhaps the most important question you can ask with these smaller sample sizes is whether or not any variance is actually an indication of a problem, or rather just an indication of normal cycles of changing conditions. ie. “was it me, or was it the market”.

      Your assessment of current problems sounds reasonable – in particular reacting to signals on the LTF rather than waiting for them to appear over multiple timeframes through to your H4 TTF. This is certainly worth reviewing in detail and considering the need for change to your process & plan. And setting up a trial for the next group of trades.

      Be sure to consider though – is this actually a necessary improvement and not just a reaction to underperformance in one group of trades? ie. had the change been implemented for prior groups, would it have added value to their results as well?

      Best of luck,

      Lance

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