I was having a discussion with a non-trading friend the other day. I was trying to explain what I think are the important variables in being a profitable trader. I had a bit of trouble explaining a few things from a pure numbers point of view, so since he had his computer nearby I done a little Excel calculator. It's actually quite handy, so I thought I'd post it up here and see if anyone else finds it useful. It's better for daytraders and maybe very short term swingers, but it can be used for any trading style really. If you are using the concept of R multiples in your trading, which is nothing more than describing your wins and losses in terms of the initial risk, you might find it a bit crude. Still, you should have a figure for your average trade, so it can still be used. I'm gonna do up another spreadsheet that allows you to input all your trades, have them sorted into Rmultiples, and have the sheet calculate your average trade for you. Obviously a simple thing like this isn't gonna TRANSFORM anybody's trading, but it's nice to see how a change in trading style/strategy - getting bigger size wins, smaller losses - translates into raw profits. The variables are pretty self-explanatory, but i've attached a note just in case. If anyone's got something more sophisticated (a bet I'd take anyday!) they wouldn't mind sharing, give us a look at it!