The 15 Key Numbers A Trader Better Know

  1. How many years of work are you willing to put in to be a successful trader?
  2. What percentage of returns on capital is your annual target?
  3. What is the maximum percentage of draw down you are willing to endure?
  4. How big is the bid/ask spread on your trading vehicle? What percentage of it will make up your trade?
  5. Is your trading account big enough to handle the commission drag for your trading frequency?
  6. How big of position will you take based on the trading vehicles volatility and your maximum percent of capital at risk?
  7. At what level will you stop out of a trade for a loss?
  8. Where will you take your profits?
  9. What is your expectations of winning percentage based on research?
  10. What is your risk/return ratio based on your potential profit and your stop loss level?
  11. What is the maximum string of losing trades that are probably based on your research?
  12. How many losing trades can you survive in a row before being unable to trade financially or mentally?
  13. How many is the maximum open trades you will have on at any one time based on your risk parameters?
  14. How many of your trading vehicles are correlated in movement and by how much?
  15. At what percentage of a loss to your original trading capital should you quit trading because your system, risk management, or methodology is proven wrong?