← Glossary Free resource

Average execution rating

Trade grading is the rating you give yourself for how you ran a trade: entry matching the plan, size respected, stop placed, exit decided in advance. It does not judge the result, it judges the action. The two are independent, and that is the whole point.

The formula

Average of the ratings YOU give each trade (adherence to entry, exit, sizing plan).

How to read it

Your self-rated discipline. Cross it with P&L: well-rated but losing = bad luck; poorly-rated but winning = a bad habit rewarded.

Cross it with P&L and you get four boxes. Well executed and winning, that is the job. Well executed and losing, that is normal and nothing needs fixing. Badly executed and losing, the lesson is clear. Badly executed and winning is the dangerous box: the market just rewarded a mistake, and nothing installs a bad habit faster.

The classic mistake

Grading after seeing the result. The grade then becomes a justification and loses all value. It is given at close, before opening the curve, or not at all.

To go deeper on this : read the full guide. Every term is gathered in the glossary.