I'm interested in using statistical analysis to improve my trading and I'm looking for ideas to help me achieve that. In terms of schooling I've had one course in introductory statistics, but I'm very much willing to learn more if it helps me improve my results. However, I do have to emphasize that I'm only interested in the kind of analysis that tells me where I could improve my results. Fancy-schmanzy formulas that don't tell me anything useful are....well, useless!
I'm currently keeping tabs of my average pip gain per trade and the number of trades I took over a week. This tells me several things:
(1) how well I followed my rules --> I have a rule that states how many pips I want to make per trade, for example
(2) how confident/nervous I was (ie. the psychological side) --> usually less trades = more patient/confident
(3) how I handled different market conditions (it allows to identify if I'm better at trading trending/ranging/volatile/quiet markets and then build on it)
(4) etc.
The aim of this is to identify the weak spots and hopefully correct them. For example, analysing this week's trading, I discovered I became more and more nervous over the week, my pip count per trade dropped. I know for a fact that I wasn't very good at following my own rules on the last two days of the week, but the 'average pips per trade' puts a concrete figure on it. Compared to the beginning of the week, I was much worse off. I have an objective number and I know what to do next - try following my rules better next week. Without a number, trying to tell how good one was at following one's own rules is kind of tricky. I will run the same analysis next week and I will know exactly how well it went and whether I need to work more on the psychological side or whether I can put that to rest and use that time to improve my strategy.
I just started taking this seriously and I'm interested to find out what kind of analysis you would do if you were me. Let me know!
EDIT. I should also mention that although I couldn't find any threads on FF on this very topic, I welcome any and all links to previous discussions here and elsewhere on the same topic.
I'm currently keeping tabs of my average pip gain per trade and the number of trades I took over a week. This tells me several things:
(1) how well I followed my rules --> I have a rule that states how many pips I want to make per trade, for example
(2) how confident/nervous I was (ie. the psychological side) --> usually less trades = more patient/confident
(3) how I handled different market conditions (it allows to identify if I'm better at trading trending/ranging/volatile/quiet markets and then build on it)
(4) etc.
The aim of this is to identify the weak spots and hopefully correct them. For example, analysing this week's trading, I discovered I became more and more nervous over the week, my pip count per trade dropped. I know for a fact that I wasn't very good at following my own rules on the last two days of the week, but the 'average pips per trade' puts a concrete figure on it. Compared to the beginning of the week, I was much worse off. I have an objective number and I know what to do next - try following my rules better next week. Without a number, trying to tell how good one was at following one's own rules is kind of tricky. I will run the same analysis next week and I will know exactly how well it went and whether I need to work more on the psychological side or whether I can put that to rest and use that time to improve my strategy.
I just started taking this seriously and I'm interested to find out what kind of analysis you would do if you were me. Let me know!
EDIT. I should also mention that although I couldn't find any threads on FF on this very topic, I welcome any and all links to previous discussions here and elsewhere on the same topic.
If you don't risk, you don't ever have to lose.