Your Most Recent Performance is the Best GaugeWe're always looking for an edge over the market when we're trading. You know, trying new things, looking at a range of indicators, or analysing the performance of some other secret system you've 'thought up'. These additional tit bits are what we call probability enhancers.
The aim of "Probability Enhancers" is to micro-analyse an opportunity so you can hopefully reduce the overall risk in the trade. After all the more factors in your favour the better right. The best thing about this is it can be a key trigger for you to increase your trade size and that's when things can really interesting in your account! You know what I'm saying.... cash!
Because the market is so dynamic it's hard to find some consistency with some of the 'probability enhancers' you may be using. Don't forget most 'technical indicators' lag the market by 3-4 hours so they are completely useless.
But probably the least know or last thought about 'probability enhancer' is analysing your own account and recent trading performance. There's so much detail in your trading account that if read correctly can be used to enhance your overall performance especially when it comes down to particular trade set ups.
Check my recent trade performance - which is patchy at best.
Now this tells me a huge amount of where I'm going wrong and where I'm going right. But I've been so busy tuning up the site I've taken my eye off the whole performance management. And this can happen to you as well as most of our members are managing a full time job and busy family commitments.
Where I have been going wrong?Symbol - Number of trades - I've been trading the AUDUSD way too much and getting very little return for my efforts. Now this is because traditionally over the past 25+ years I've made a lot of cash on the AUD. So it's my natural got too. But you have to be smart with your performance. If the pair isn't giving you 'joy' then reduce your trading at that pair for a while. Maybe give it a week or even a month.
39.5% of my trades were on the AUDUSD - and it's been trading like a dog!
So if I was looking at a potential trade today on the AUDUSD I'd think long and hard about it and if i did pull the trigger it would be on a very small 'trade size', because for whatever reason I'm not having any luck on the AUDUSD. Let the stats tell you what to do!
Where have I been going right (but at the same time sort of wrong)?Symbol - Pips - I've been doing very well with both EURUSD & USDJPY but it hasn't been obvious to me because I haven't check my trading account stats. So in actual fact this is another area i was going wrong because i should have been trading EUR and the JPY more!
18.5% of my trades were on EURUSD - and it's been the best trending pair (so no bloody surprise).
12.6% of my trades were on USDJPY - and it's been a good range/breaking pair.
So I'm making more points with fewer trades with these two pairs. That tells me I'm more in tune with EURUSD & USDJPY then I realise. Now that doesn't mean I change tact and just trade these two pairs but it should definitely be a trigger for me to focus on them a bit more and if I do see an opportunity then potentially increase my trade size, especially if the ducks all line up!
Now Let's Dig a Little Deeper as there's More to the StoryThe stats go much deeper than just what currency pairs you're trading and you need to really understand the data to learn from it. You need to understand 'what your natural preferences' are so that when certain market set ups occur you know which ones to avoid and which ones to attack!
Check this Directional data - it tells me a huge amount of what my preferences are at the moment.
Direction - Number of trades - Ok straight away I recognise I'm a bear. For whatever reason I have a preference for going short. Now I know that's always been my preferred trade and it stems back to 1990 when I started at Citibank on the FX trading desk. I was trading the AUDUSD and it always went down. In fact it seemed to just go down. So we naturally got short every day! And that underlying bearish tone has stayed with me, particularly on the AUDUSD!
Can you see a pattern yet? I'm naturally bearish AUDUSD, I love getting short and the AUD has rallied 500 points. A third of my trades have been on the AUDUSD, no wonder I'm underperforming. Doh! (What an goose, check your stats traders - this is a brutal lesson).
Direction - net profit - Ok I made more money getting short but in actual fact I almost did twice as many trades so it's no surprise. But If I see a bearish pattern emerge I should be paying close attention!
Day of Week - Net profit - This is an interesting one. I make more cash on Tuesday's and Wednesday's! For whatever reason over the past month those are my main days. I would have thought it was Wednesday and Thursday...but the stats don't lie.
There's Loads of Detail You Can ExploreWe added the 'My Trading Account Analysis' to the website for this very reason. But I've noticed the majority of you aren't using it so it's time to show you what it can do for you!
There are loads of stats for you to explore, from trade duration, to pips per day etcetera.
So the smart thing to do is log into 'My Trading Account Analysis' and plug your account details in. Work through each section and work out what pairs you perform best in, what is your natural trade preference, what day of the week do you perform best etcetera.
Once you have this detailed information you can really attack the market when it's set up to your personal trading preferences. This is some of the detailed work I cover during the '1 on 1 coaching sessions'.
For me right now I have to be careful because at the moment the EURUSD, GBPUSD, AUDUSD & NZDUSD are rallying. So maybe I should focus on USDYEN & USDCAD as the USD is going down and particularly on Tuesday & Wednesday's.
If I see an opportunity to trade I'll cross check the opportunity with my current performance and that my friends is the best 'probability enhancer' you can have!
Good Luck
