Letting Winners Run To Improve Trading Performance – Trading Journal Review #4
Today, we reviewed another journal from one of our users and made some interesting observations. First, let’s explore how to input trade data to get the insights about how to let winners run or cut losers.
Do you want us to review your journal? Take a look here: Edgewonk’s free journal review
Highest Price / Lowest Price
Here you input price data about how high and low price moved during the trade.
Generally, you would follow price until price has either reached the take profit or the stop loss and then input the data into Edgewonk.
In this journal review the trader did not follow the price long enough and he entered his highest/lowest price data only until he closed the trade, even if he closed the trade before the price reached his stop/target.
Updraw / Drawdown
Entering highest/lowest values into your edgewonk journal will activate the Updraw/Dradown. Those metrics show how close price came towards your take profit and stop loss.
In this review, we saw an Updraw of 75% for his winners. His initial Reward:Risk ratio was 2.8, he cut his winners on average at a Reward:Risk of 1.2 which is well below the 75%.
We can so see that he could potentially improve his performance significantly if he’d give his trades more time to play out.