Chapter 11Habit #8: Measure Your Performance

Elite performers, such as athletes, chess masters, and concert pianists devote almost all their time to perfecting their crafts. They might be repeatedly practicing their existing skills, fine-tuning them, and learning new ones. They constantly seek improvement and will feel they are not maximizing their potential when they make little or no progress.

How do they know where their skill levels stand? How do they know if they are making progress or moving backward? Professionals set up metrics to objectively measure their performance. For example, a professional golfer's performance can be tracked with his driving distance, fairway hits, green hits, putts, and so on. A chess master's performance is measured with chessmetrics, a weighted average of past performance that considers his win percentage against other players' past results.

Measuring the performance with objective metrics reveals where the performer's perceived level of skill is, where the actual level is, and where the expected level is. When the performer and her coach see the gaps among these three, they will work to close the gaps.

Similar to top performers from other fields, successful traders keep track of their trading performance with well-defined performance metrics, too. They track every trade they make and analyze the data every week or month. They monitor the metrics to figure out their strengths and weaknesses, monitor where their current performance stands compared ...

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