The importance of keeping a ledger when trading

This is going to be a short post, essentially I want to emphasise the importance of keeping a ledger or key performance indicator (KPI) whenever you are trading. There are several reasons for this and I'll go through each one to analyse why.

Track your progress


This is the most obvious reason to keep a ledger, you can track how well you are doing from a numbers perspective. After all, you may feel like you're performing well, but it's the numbers that will tell you.

Helps to Tweak Your Strategy

A well detailed ledger showing things like what you've staked how much, averages, on what trades and so on can really help you to identify where you may need to tweak your strategy. For example, if you strategy requires a high or low strike rate you can see this information at a glance. If you are a lay to back kinda guy, then you can see how much liability you put on the line per trade and adjust your trades to limit your liability. The ability to tweak thanks to this sort of data is limitless.

Keeps You Focused

I mentioned in a previous post how I lost a stupendously large chunk of money thanks to a number of reasons. Initially I was dreading putting this information into my KPI. It's a real tough pill to swallow, I sat on the data for a couple of days, and at this point in time was back to trading normally. When I did come round to putting the latest data in I realised that -yeah I'd lost a lot- but actually the general trend was still good. The win ratio was good, everything was green really. Fucking about can mess your charts up though, and your averages. This is something worth bearing in mind. But you should always enter the results of your trade, good or bad.

Identify a Poor Strategy


Probably the most important reason to keep a ledger, if you don't you can't really see how good the strategy is. Yeah, you can can tweak the strategy. but really you should get a good indication of the win loss ratio and identify pretty quickly whether the strategy is a keeper. 

Also, who doesn't like pretty charts indicating money going into your pocket


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