Improving the use of statistics in my day trading plan

A while ago I wrote an article on how I use statistics in my trading. Over time the list of stats I use has grown into a list of 32 items, whilst some can be grouped together, this still was a list of 24 stats to keep an eye and incorporate into my trading.

As I had noticed in a previously in Repeating the Best Practice, the way I calculated my stats has changed over time. I also had noticed that the list of stats had got more complex and I was having trouble including these into my trading plan.

Or to be more precise, I was focusing only on a few stats and not using the others as it was too time consuming and complex.

As part of my Best Practises Manual, I decided to simplify the whole process.

Step 1 – Schedule and Settings

I have written a schedule of when I update these stats and what settings I am using each time. This will introduce some consistency in when and way I calculate the stats.

Step 2 – Make it easy to do

Some of my stats where calculated in Excel and some using the RT Investor Charting Software.

My next step was to convert all my stats in excel to RT Investor. I did this on Thanksgiving whilst the market was quiet, and it took me a good 5 hours but in the future it will save me time and will make it easy to update my list.

Some of the stats charts I downloaded from RT Investor Homework section, I then re purposed these to give me the stats I wanted and some of them I wrote from scratch. I am no expert with the RT Investor RTL, but by examining the downloaded charts I managed to learn enough to write by own stats charts.

My point is that if you are familiar with doing stats on excel, then a bit of time spent looking at Chad charts should give enough information to make your own charts in RT Investor / Market Delta.



I then rename all my charts and remaining excel documents that are stat based with the prefix STATS, thus making these charts and documents easy to find.

Step 3 – Incorporating my stats into my day trading plan

Previously, I would look at the chart, see where price opened or where price is trading and then check my stats document and then write out the relevant stat into my day journal and then incorporate into my intraday plan.

As my list of stats increased, this document expanded and ended up at 3 pages long. The result was I would occasionally miss a relevant stat or on some days, where I would have a few stats in play and I would have trouble incorporating all this information into an intraday plan that dove tailed into my overall daily hypo.

My observation is that if a practice is too complex then the tendency is that either it does not get implemented or not implemented correctly every time. Something has to change if I am to bring consistency to all of my best practises.

Instead of a 3 page document listing all my stats, I reduced this to an one page cheat sheet with only the relevant information in shorthand and divided into sections split between open, high, lows, etc.

I went further and numbered the most important intraday stats, so that I can refer to them by number in my day journal and I will now note whether the stat is positive or negative for the bias.

An example of how I enter this into my day journal.

From this I have found it easier to work these stats into my areas of interest and overall plan.

This has been all updated into my Best Practises Manual, and will be the routine going forward.

2 thoughts on “Improving the use of statistics in my day trading plan

  • 29/01/2016 at 04:10
    Permalink

    Are you still keeping a manual daily stat sheet too ?

    Eg H,L, IB, Range, Volume, Day Type etc

    Reply
  • 29/01/2016 at 09:45
    Permalink

    Hi mate,

    I do not have a manual stat sheet anymore. But my cheat sheet has H,L, IB, Range, Volume, Day Type etc type stats which are updated monthly.

    The only stats I update weekly are the mode and standard deviation on rotations on the 15 min and my execution chart (3min) on a rolling 30 trading days look back to try and factor in current volatility.

    Here is my full list, it is in short hand, any questions just ask. http://screencast.com/t/Ci8pW6Ny49

    All of this is calculated thru RT Investor.

    Adey

    Reply

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