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## Statistics and the Equity Curve

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**Statistics and the Equity Curve**An analysis of our trading methodology**Statistics is a mathematical sciencepertaining to the**collection, analysis, interpretation or explanation, and presentation of data.**Statistics**• Statistical methods can be used to summarize or describe a collection of data. • There are numerous methods of collecting stats. I will be looking at what methods work for me. • Gathering data for stats can be a chore but is well worth the effort. • Statistic refers to calculated from a set of data**How I gather my statistics**• I use a notebook to write down all trades in the TF, NQ and GC • I use an excel spreadsheet to help me collect and analyze the data. Woodies CCI Stats Workbook is available in the forum. I setup a different workbook for each market. • Throughout the day I am entering the trades in the workbook.**Data needed for workbook**• Time of entry • Pattern taken and direction of the trade • Entry price • MFE(maximum favorable excursion) or peak of trade • MAE(maximum adverse excursion) or drawdown of trade • Exits**Woodies CCI Stats Workbook**• Allows one to track up to 30 trades per day • Calculates four different exit strategies • For or against trigger bar analysis • Ability to add two additional patterns to Woodie’s basic cci patterns • Moving average equity chart with real time switcher indicating whether to take the next trade live or sim • Monthly summary analyzing your trades for the different exit strategies • During active months the equity curve may get maxed out, I just start a new workbook**Equity Curve**• The value of a trading account graphed over a period of time. • Woodies CCI Stats Workbook graphs your trades vs a 10 trade moving average of your trades to help you to determine if you should be trading live or not • Others use the equity curve from their live trades….like the equity curve included in the Woodie’s Trade Navigator. The TN equity curve can be adjusted to whatever MvgAvg you desire**Equity Curve continued**• Create your own equity curve with Excel • Some equity curves switch you from live to sim based on the direction of the curve • Woodie’s CCI Stats Workbook goes from sim to live based on whether actual equity curve is above or below the average equity curve • Personally I saw a lot of chop around the curve and decided to go live as long as actual equity is no more than $100 below avg**Equity Curve continued**• Although some dismiss the equity curve as an impossible attempt to avoid drawdown, I believe it can be used to one’s advantage • Certainly one does miss winning trades but my experience shows I miss alot more losers than winners(especially in times of major drawdown) • Some markets may be better suited than others for using the equity curve or switcher