Sunday, March 7, 2010

Tracking Performance

Trading, as Dr. Brett Steenbarger often says, is a performance activity. And you need some sort of metric to tell how good your performance is. I'll admit that for the first couple of years I was trading, I just bought and sold stuff without really keeping track of how I was doing. Needless to say, that wasn't the best way to go about it.

I'm a lot more rigorous now. I keep a trading journal, a performance log, and a trading diary (this blog). Here's the items I track on a daily basis in my performance log:

Date Dow close Dow daily change Daily Dow %
Tot. invested Daily change Daily % ROI Trading Balance
Tot. Week Wk. pct. Return Pct. Cash excl. bonds
Tot. Month Mo. pct. Change YTD % total return
Dow YTD % return Daily perf rel to Dow
Bonds Deposits / withdrawals
Tot. Year Monthly commission No. of realized wins No. of realized losses
Mean win size Mean loss size

Last week was my best since the beginning of the year. I was up 1.8% on the week. This puts me up 2.13% year-to-date in my trading account. This was particularly gratifying since I'd gotten hammered with five consecutive losing weeks beginning in mid-January.

One item I watch closely is my performance relative to the Dow. So far, I'm outperforming the Dow by 16% YTD. My primary performance goal is to at least match the performance of the Dow. If I can't do that, I might as well just put all of my money in the DIA.

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