Elite traders are cocky. Felix Dennis perhaps said it best when he said that "Making money is certainly that one addiction I cannot shake." Dennis, like many other successful traders, believes that they will continue to make money. Their confidence comes from knowing the most intricate details about their trading. Remember that as a Forex trader you are a money manager and must keep track of how you are preforming. This can be done by reviewing your trading history and analyzing your trading journal. Thus should be done on a consistent basis. But wait, we still haven't told you what numbers you need to know ! Here are the eight metrics that each trader needs to calculate:- Percentage of winning trades(How many trades have you profitably close)?
- Average Gain/Loss(The average of all winning and losing trades). If your average loss is bigger than your average gain and your winning percentage is not over 60%, you should rethink your trading strategy.
- Average Trade Duration(How long do you hold a trade for on average)?
- Most Profitable Currency Pair(What is your bread and butter pair)?
- Drawdown (The percent decline from peak equity to a its trough)?
- Run-up(Largest win streak in account)?
- Drawdown/Run-up Ratio( In dollar terms, how does your worst losing streak compare to your best winning streak)?
- Expectancy(Determine whether your system is profitable)?
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