Finding New Edges from Old Trades

June 18th, 2008

Jeff White from TheStockBandit.net penned this guest post about the value of reviewing your trading results. This very topic is why StockTickr exists, so whether you’re trading manually or have moved to automated trading, I think you’ll enjoy it. This is the first in a series of guest posts on trading improvement. Subscribe to this blog to follow them (it’s free).

Is it me, or is the new thing to be “retro?”

From hair styles to clothing, there’s definitely a trend in pop culture these days to find some value in the past and bring it into the present.

Now I’m never one to fight the trend, so let’s just go down this road a little while and see what it might mean for us as traders.

It’s hard to argue with the idea that hindsight is 20/20, so naturally it behooves us to take a gander in the rearview mirror and see what we can learn from our past trades. After all, history can be our guide, right?

Looking Back Means Stepping Forward

I’ve always found it to my benefit to reflect on my trading results periodically. I want to find some statistics which can help me going forward. I want to see the data that tells me which trades are working best, and which ones I should be avoiding. Oh sure, I’m very aware of how profitable my trading is over a designated stretch of time, but to see some substance behind those results is often an eye-opening exercise.

Just recently, I was reviewing my trades which fit into a particular category for the previous two months, and I was pretty shocked at what I found. The P&L for these particular trades was a superficial afterthought, and truth be told, the top-line number provided me with no useful insights about any adjustments which may have been needed going forward. It was acceptable, but the diligent trader is always seeking to build his edge.

Amazingly, examining the trades in closer detail offered me a very clear-cut shift that I needed to make in order to increase my profitability on those types of trades. By making even a minor modification to my exit strategy, I realized that I’d quickly see better results in my overall profitability. As a result, I found the review to be well worth my while.

Review Results, Revive Your Trading

Taking a trip down memory lane for a little while with your trading can ultimately propel you forward at an alarming rate down the road to profitability. Regardless of your trading method or activity level or timeframe, you’re sure to see some clear ways you can improve your trading results if you’ll start looking in the right place.

The reports that StockTickr generates automatically have a wealth of knowledge in them just waiting to be discovered. Whether you’re reviewing Trade Type Performance, Time-Based comparisons, or just looking at your Win % for a designated period of time, there’s no doubt that you’ll uncover info which sheds some light on your trading.

As you realize the benefits that “going retro” with your trading can offer, you’ll commit to doing it more often. We all make time for the things which are important to us, so it’s only natural that as traders who seek to increase our profitability, we take an occasional step back in time so that we can jump forward with our future.