Morning Friends,
in the past few month my interest in performance measurement was growing. And I have to say, there are a lot of helpful statistics, that show you very clear, if you are really a consistant successful trader and were you should invest some time for improvement.
Yesterday I stumbled over the "Sortino Ratio", it's an adapted form of "Sharp Ratio", which takes only the Standard Deviation for the "bad volatility" in your results into account. (See here).
Trying to become "interesting" for professional trading institutions has shown me, that making profits is not enough for becoming a pro. You have to to it inside strict risk parameters, with your allowed money lines and in a very constant way. So I started to do some statistical calculations on my trading results. And I'm sure - you know it already - my results are ok, but far away from being constant in a professional sense ....
Create an Excel sheet (or what ever) and fill in your trading results day by day. Calculate the your max DD, your Risk-adjusted Performance, Sortino Ratio, or what ever. Set your max DD in relation to your average daily profit. Build the relation between invested money (Risk) to earned profits and so on ...
I can only give this recommendation to you, because it shows you your real trading skills very honest (without cosmetics and self-deception).
All the best,
Niels
in the past few month my interest in performance measurement was growing. And I have to say, there are a lot of helpful statistics, that show you very clear, if you are really a consistant successful trader and were you should invest some time for improvement.
Yesterday I stumbled over the "Sortino Ratio", it's an adapted form of "Sharp Ratio", which takes only the Standard Deviation for the "bad volatility" in your results into account. (See here).
Trying to become "interesting" for professional trading institutions has shown me, that making profits is not enough for becoming a pro. You have to to it inside strict risk parameters, with your allowed money lines and in a very constant way. So I started to do some statistical calculations on my trading results. And I'm sure - you know it already - my results are ok, but far away from being constant in a professional sense ....
Create an Excel sheet (or what ever) and fill in your trading results day by day. Calculate the your max DD, your Risk-adjusted Performance, Sortino Ratio, or what ever. Set your max DD in relation to your average daily profit. Build the relation between invested money (Risk) to earned profits and so on ...
I can only give this recommendation to you, because it shows you your real trading skills very honest (without cosmetics and self-deception).
All the best,
Niels