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You will need to identify the right number of trades for you to evaluate, but this number needs to be high enough that you have a decent sample set, but low enough where it prevents you from going on a destructive trading binge. This applies to both my swing trading and day trading activities.
Companies report on a quarterly basis to the street, which fundamental analysts then feverishly work through the data to assess a company’s future growth potential.
Well, how long should you wait to evaluate your trading performance…yearly, monthly, daily? Base your evaluation period on the number of trades placed and not by the amount of time passed. Trading is one of the few areas in this realm, where the space-time continuum are of no relevance.
Whatever your trading style, make sure you identify the plays that have the highest odds of profitability.
For day traders, you will want to focus on the market movers.
I only mention the time element so you can see how long it takes me to place that number of trades based on my trading style, but you can easily perform the same math in your head.
So, what is the number of trades you will use when evaluating your trading activity?This essentially translates to the fact I profit three times more than I lose. There is no set minimum or maximum R value; however, you will want to track your performance over time and quickly identify when you are below your historical average.For my day traders, I highly recommend you limit your trading activity. Any trade activity occurring before or after this zone, I am purely a spectator on the sideline.Similar to the times of day you will trade; keep your trading edge down to one or two setups when starting out.The more strategies you hope to master, the more difficult it will become to consistently make money in the market.The 2% threshold is based on the volatility of the stocks I trade and may not be suitable for your trading style.The point here is just to make sure you have a stop loss.This provides you with the greatest opportunity for locating stocks that are trending hard with high liquidity.Within Tradingsim, our market movers component provides you the top list of gainers and losers in real-time.Please ensure that you are fully aware of the risks involved and, if necessary, seek independent financial advice.The educational content on Tradimo is presented for educational purposes only and does not constitute financial advice.