| Every daytrader is looking to improve | | | | the winning probability by elapsed time in the |
| performance. Some are discretionary traders | | | | trade. |
| while others use a systematic approach. Both can | | | | Using this piece of information can improve your |
| use some analysis to improve their trading results. | | | | performance in a couple of ways. Consider |
| Optimizing trade performance starts with | | | | different trade entry rules that don't commit your |
| analyzing past trade data.It is very important to | | | | entire capital on the initial signal. Use simple time |
| track every trade and its characteristics. After | | | | checkins to add size to your trade to reach your |
| building a database the analysis can begin. The | | | | optimal trade size. It can be a simple as buying |
| first step is to sort the trades. An important first | | | | every five minutes as long as the trade is alive. |
| sort is by winning and losing trades. Winners and | | | | By staggering the entry, the quick losing trades |
| losers share characteristics and careful analysis will | | | | will automatically have lower size than your long |
| unlock better overall system performance. | | | | winning trades. The average winner will improve |
| Two prominent characteristics of winning trades | | | | as the average loser will decrease. This lowers the |
| are time and price. One of the most important | | | | overall drawdown potential . It will also raise your |
| goals after a trade has been executed is defining | | | | expected return. |
| it's likely outcome. Sorting previous trades can | | | | An old trading maxim is to cut winners short and |
| help accomplish this goal. Isolate all the winning | | | | let winners run. Knowing your time performance |
| trades and sort by length of time in the trade | | | | data helps accomplish this goal. If you track the |
| until closeout. Find the average time in the trade. | | | | PL of your trades on every bar, it leads to |
| Compare that number to the same calculation | | | | another discovery. Graph the results and look at |
| with the losing trades. The winners have a longer | | | | the chart. The winning trades not only last longer |
| average time than the losers. Losers will tend to | | | | but have an upward slope. The losers will have a |
| be quick. | | | | downward slope. Employing a trailing stop will cut |
| It seems like this piece of information is minor. | | | | the losers off but allow the winners to run by |
| But, it can be a powerful tool to the daytrader. If | | | | having a trailing stop below the winning slope. |
| you delve deeper into the data in excel you can | | | | Analyzing past trades is the key to improving |
| isolate a time frame that defines when only | | | | results. |
| winners survive. Create a histogram that gives | | | | |