I just saw a statistic on CNBC that on 50% of Friday the 13ths since the year 2000 the Dow went up. A useless piece of information or is it? It tells me that I can make no assumptions about price direction because it is a Friday 13th.
Gathering statistics is an important tool for traders. For me, it's not about this type of statistic but about the statistics that relate directly to my trading methodology and style. That is not to say that getting these general statistics as I call them is useless. probably the most well known user of the general statistics is a guy called Larry Williams (Google him if you're interested). Larry looked at day's of the week, of the month etc. and used them to his advantage.
Me, I'm interested how far away I need to keep my stop so as not to get stopped out of good trades. I need to know what my win rate is, what my average trade is, what my average win is, what my average loss is, how many losses in a row is likely, what sort of draw down is likely.
I want this information for two reasons: to regulate the way I trade and to adjust my expectations in order to maintain my discipline. Both of these aspects are crucial to consistent profitability. Doing all the back testing and record keeping really pays off. I used to use an Excel spreadsheet but now use MSA from adaptrade.com as I have recommended in the past.
Today's morning Euro FX.
Today's morning Euro FX.
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