How a Poor Start Can Affect the Rest of Your Day

How does your performance in the beginning of the trading day, affect how you trade and how does it affect the ensuing results for the rest of the trading day?. I am referring to getting a good start, or getting a poor start (in terms of P/L) to the day. Take a look at the following example, taken from a discretionary trader. This is actually quite common...

Below is a representation of a string of 19 trading days in March. The colored left column represents the date; the days highlighted in green were winning days and those highlighted in red were losing days. The third column represents the total P/L earned or lost during the specific hour of day (indicated in the middle column).



Out of the 19 trading days, 11 were losing days and 8 were winning days. Two significant trends appear:

1) 8 of the 9 days in which the first trading hour was negative (represented in yellow), have turned out to be losing days. I might conclude the following: For the past 4 trading weeks, when I've been down after my first hour of trading, 89% of the time the rest of the day ended up as a losing day.

2) Of the 8 days in which the first TWO hours were negative, all 8 days have ended up as losing days. From this I might conclude that over the past month, when the first two hours of my trading day were both negative (in terms of P/L), 100% of the time, I have ended the day in a loss.

© Copyright 2007 David Adler
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All analysis generated with the TraderDNA Analyzer.