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Trade Like a Casino: Find Your Edge, Manage Risk, and Win Like the House by RICHARD L. WEISSMAN

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Chapter 11

Analyzing Performance

Know thyself.

—Inscribed at the Temple of Apollo at Delphi

In many careers, it's easy to blame a boss or coworker for a failure; in trading, you either take responsibility for failures and successes or shift the blame to the markets. This chapter explores a variety of techniques for consistently and exhaustively examining your actions so you can eliminate delusional notions and learn from your trading results. Although these techniques may seem tedious at first, they are invaluable in exposing blind spots in methodology, inconsistencies in planning, and failures in execution. You only get out of the markets what you are willing to put in. The more diligently you record your trades and answer the questionnaire, the more you will learn about yourself as a trader. The less you are willing to work through the exercises, the less you will learn.

A DUE DILIGENCE QUESTIONNAIRE

Commodity trading advisers, commodity pool operators, and hedge fund managers typically include a due diligence questionnaire in their marketing materials because it informs potential investors of the goals of the fund, risk tolerances, investment strategies, and so forth. Over the years of working with traders, I developed the questionnaire featured here to help articulate strategies as well as identify strengths and weaknesses in a comprehensive fashion. Although some questions may not apply to each reader, to get the most out of this exercise, I advise completion of the questionnaire ...

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