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How to Analyse Your Trading Results?

How to Analyse Your Trading Results?

How to Analyse Your Trading Results? This is a question which not too many traders are asking. Most of them just look at their balance and that’s all.

First things first

There are several ways in which you can analyse your trading results. The first and the most important, in my opinion, for a trader is MyFxBook.com. And no. I’m not paid for saying that. This will help you to analyse your results with only 5 minutes of effort. And that’s only once. After that, you can simply watch your results whenever you want with only one click on your own MyFxBook link. You can check my verified trading results on my MyFxBook link here.

Export your trading results

The second method if you use MT4 trading platform is to open it. And from ‘View’ menu just press on ‘Toolbox’. From your toolbox go to ‘History’ and then right click. You’ll see several options to export your entire trading history. You can also choose a custom period if you used different strategies over different periods of time. Here’s a sample from my trading account from the last two moths. An important detail: please, try to use your zoom to read it better.

capital-patterns-trading-results
Capital Patterns trading results – February – April 2020

A lot of data to analyse, right?

That’s exactly what I thought when I first saw that, few years ago. But, very few of them are really important. And, the most important entry to watch is ‘Average profit trade’ and ‘Average loss trade’. You need to make sure that on average you win more than you lose. In my case, when I win, I get almost twice as much then when I lose. So my ‘Average profit trade’ is 47.57€. And my ‘Average loss trade’ is 25.40€.

What exactly does that mean?

Simple. It means that I can lose 2 out of three trades and still be on breakeven. So, it means that I can have a success rate of only 33% in order to not loose money. Pretty comfortable right? Now, if you link that information with the next results you’ll get a better idea: Head and Shoulders Patterns 64% Win Rate, Inverted Head and Shoulders 71% Win Rate, Double Bottom Patterns 45% Win Rate and last but not least Cup and Handle Patterns 17% Win Rate.

Why is it so important to know how to analyse your trading results?

Most of the traders at the beginning of their trading career, just focus on how to get a very high success rate in their trading method. And I did the same mistake in the past. But, in the long run this is impossible to get. It’s not me who said that. If you’ll search on google, you’ll find a lot of reliable studies who said it. So, an important thing to understand for a trader is the distribution concept from the statistics.

What distribution concept means?

It means that you can get a trimester, a semester or even a year with a very high success rate and then, you get a few trimesters, semesters or even years when your trading method won’t work in the same way. You’ll actually have a lot of losses in a row, just like you had a lot of winners in a row in the beginning. And then you’ll search for another method and so on. And if you don’t realise that sooner, you may end up living with the false impression that trading is a fraud. Therefore, I highly recommend you to look for a basic statistics course if you’re not familiar with this domain. There are plenty out there.

The conclusion

I have a simple conclusion here. There are a lot of trading methods out there who are proven over very long periods of time. And when I said that, I’m talking about decades and even centuries of historical proven results. One of them are the chart patterns which are used from several hundred years by chartists (again, you can use google for more information about the subject). This is why I also chose to trade classical chart patterns. And, last but not least, another important thing to watch when you’re looking for a trading method is the risk reward ratio. Always look for an asymmetrical risk reward ratio with at least 1:3 to 1:5. Try to use these concepts in your trading and you’ll see results in no time.

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