I was having a catch up with my good mate and uber cool pad holder Jarrod yesterday – we both share a fascination with human performance. We are both interested in what we can get out of the machine we wander around in all day. As part of this quest he had recently been to see a dietitian who works with several AFL clubs and during the conversation they mentioned that as part of their regime they didn’t count calories. We both thought this was odd for the simple reason that without data you are operating in a vacuum, without knowledge about your calorie intake and in particular your intake of various macro nutrients you are simply guessing. And guessing simply doesn’t count when it come to assessing change.
The point here is obvious, if you are not in some way tracking the performance of your trading then you have no means by which to judge your performance. Without having a series of metrics that tell you how you are doing then you are also operating in a state of ignorance and in many cases delusion. I understand that some people dont want to track their system since this would defeat the entertainment component of trading. Knowing how badly you are doing would take the fun out of it. The same is true for people who struggle with their weight – they dont want to know how badly they are doing. Ignorance is bliss.
Performance tracking does not have to be complex – it only needs to tell you a simple story, how many trades did you get wrong, how many did you get right, what is your average profit/loss per trade and do you have more money at the end of the year than at the beginning. All this can be achieved in a spreadsheet with a little bit of playing around.
Author: Chris Tate
Article reproduced with kind permission of Tradinggame.com.au
“Be careful! It doesn't matter how good you are, if you don't use proper risk management you will fail.” - Jarratt Davis
“Having a diversified system does help but it does still make you wary of taking the next trade. But it always seems to be the next trade that you don’t take that turns things around.” – Chris Tate
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