The Risk of Trading: Mastering the Most Important Element in Financial Speculation

TRADE REVIEW AND REPORTING ETHICS

Your summary findings that your auditing efforts produce are the pipeline that will fuel your development as a trader. Your consistent time investment into assessing your performance provides a value-add that most traders do not seek to pursue. Some entities are required not only to report results and supporting KPI information, but also to produce ethical attestation statements and disclosures reflecting accurate and unbiased information. These reporting and conformity to ethics standards are becoming more the norm in the hedge fund community as it continues to migrate toward a more regulated environment. For the most part, there is no regulatory body overseeing individual traders’ reporting processes, hence the reason most do not perform any formal assessments or analytics. The one continuous theme throughout this book is that your investment in data and risk assessment will provide exponential value to your trading and your trading business. Regardless of any entity or individual forcing you to do so, it is a best practice that should be considered.

Throughout my consulting career, I have performed assessments on many traders who were eager to succeed. For one of many reasons, they did not. Their passion to succeed existed as well as their effort, but there was a common theme among many: Their strong desire could not lead them to actual trading success, however they defined such a term. When starting in a simulated trading environment, I would ...