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Richard C
Richard C

Posted on Originally published at Medium

The 5 Trading Stats Every Trader Should Track (With Formulas and Worked Examples)

#trading #spreadsheets #datascience #beginners

Not financial advice. This article is for education only. It explains how to measure your own trading results. It does not recommend any trade, strategy or product, and trading carries a real risk of loss.

Most traders can tell you about their best trade. Far fewer can tell you whether their system makes money. Your P&L for a single week is mostly noise. Five numbers, calculated from a plain trade log, tell you much more.

All you need is a log with one row per closed trade: date, instrument, entry, exit, size, and the profit or loss in money. Add one more column if you can, planned risk (how much you would have lost if your stop was hit). That one column unlocks most of what follows.

All numbers below are made-up examples for illustration, not real results.

The example data set

We'll use one invented sample of 20 closed trades throughout:

Count Average P&L Total
Winners 8 +$150 +$1,200
Losers 12 −$60 −$720
Net 20 +$480

1. Win rate 

Win rate = Number of winning trades / Total closed trades
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Example: 8 / 20 = 40%.

How to read it: On its own, almost nothing. A 40% win rate can be very profitable and a 90% win rate can lose money. Win rate only means something next to the size of your wins and losses (the next stat).

Pitfalls:

  • Decide up front how you count break-even trades (exclude them, or count them as their own bucket) and stay consistent.
  • Small samples lie. Twenty trades is enough to practise the maths, not to judge a strategy.
  • Chasing a high win rate often leads to cutting winners early and letting losers run, which quietly wrecks the other numbers.

2. Risk:reward (R:R)

There are two versions, and it helps to track both.

Planned R:R (before the trade):

Planned R:R = |Target − Entry| / |Entry − Stop|
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Realised R:R (from your results):

Realised R:R = Average win / |Average loss|
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Example: $150 / $60 = 2.5. The average winner is 2.5 times the size of the average loser.

How to read it: Combine it with win rate to find your break-even point:

Break-even win rate = 1 / (1 + R:R)
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With R:R = 2.5, break-even is 1 / 3.5 ≈ 28.6%. Our example wins 40% of the time, so it sits above break-even.

Pitfalls:

  • Planned R:R is a wish; realised R:R is what happened. If planned is 3 and realised is 1.2, look at your exits.
  • Moving your stop after entry changes your real risk. Log the original stop.

3. Expectancy

Expectancy is the average amount you expect to make (or lose) per trade, based on your history.

E = (Win rate × Avg win) − (Loss rate × |Avg loss|)
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Example: (0.40 × $150) − (0.60 × $60) = $60 − $36 = +$24 per trade.

It's often more useful in R-multiples, where 1R = the amount you risked. If each trade risked $60:

E_R = (Win rate × Avg win in R) − (Loss rate × 1)
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(0.40 × 2.5) − (0.60 × 1) = +0.4R per trade.

How to read it: Positive = your process has made money on average so far; negative = it hasn't. R-based expectancy lets you compare periods where your position size changed.

Pitfalls:

  • Fees, commissions and slippage must be in the P&L, or expectancy is overstated.
  • One huge outlier win can make expectancy look great. Recalculate without your single best trade and see if it's still positive.

4. Profit factor 

Profit factor = Gross profit / |Gross loss|
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Example: $1,200 / $720 ≈ 1.67.

How to read it: Above 1.0 means winners outweighed losers in total; below 1.0 means the opposite. At 1.67, every $1 lost was matched by about $1.67 won. It's a quick sanity check that you can read at a glance.

Pitfalls:

  • With very few losing trades it can look enormous; that's a small-sample effect, not an edge.
  • Like expectancy, it hides when the losses happened. That's what drawdown is for.

5. Maximum drawdown

Drawdown measures the worst drop from a peak in your account (or cumulative P&L) before a new peak was made.

Max drawdown = max over t of (Peak_t − Equity_t) / Peak_t
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Example: an account starts at $10,000, climbs to a peak of $11,200, then falls to $9,800 before recovering.

($11,200 − $9,800) / $11,200 = $1,400 / $11,200 = 12.5%.

How to read it: This is the number that tells you whether you could actually live with the strategy. Also note that recovering from a drawdown takes a bigger percentage gain than the loss:

Gain needed to recover = DD / (1 − DD)
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A 12.5% drawdown needs about a 14.3% gain to get back to the peak. A 50% drawdown needs 100%.

Pitfalls:

  • Measure from the running peak, not from your starting balance.
  • Deposits and withdrawals distort the equity curve. Track cumulative trade P&L separately.
  • Your historical max drawdown is not the worst you can have. Expect it can be exceeded.

Spreadsheet formulas

Assuming P&L in column E (rows 2–21), and cumulative equity in column F (starting balance + running P&L, so the peak is never zero):

Win rate        =COUNTIF(E2:E21,">0")/COUNT(E2:E21)
Avg win         =AVERAGEIF(E2:E21,">0")
Avg loss        =AVERAGEIF(E2:E21,"<0")
Realised R:R    =AvgWin/ABS(AvgLoss)
Expectancy      =AVERAGE(E2:E21)
Profit factor   =SUMIF(E2:E21,">0")/ABS(SUMIF(E2:E21,"<0"))
Running peak    G2: =MAX($F$2:F2)      (fill down)
Drawdown        H2: =(G2-F2)/G2        (fill down)
Max drawdown    =MAX(H2:H21)
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Note: =AVERAGE(E2:E21) gives the same result as the expectancy formula above, since it's simply the average P&L per trade.

Putting them together

No single number is enough. A quick checklist after every 20–50 trades:

  1. Is expectancy positive after costs?
  2. Is win rate comfortably above the break-even win rate implied by your R:R?
  3. Is profit factor above 1, and does it stay above 1 without your best trade?
  4. Is max drawdown something you could sit through again without breaking your rules?

If the answers change a lot between samples, you need more data before drawing conclusions.

If you want a ready-made place to log trades and have these stats calculated for you, I put together the Trader's Edge Journal.

Related tool: the Trader's Edge Journal tracks your trades and performance in Google Sheets.
Trader's Edge Journal

By Richard C · AIL Studio

Not financial advice. Everything above is educational. Past results, real or hypothetical, don't predict future results. Do your own research and consider speaking to a licensed professional before making financial decisions.

Originally published on Medium.

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