Today’s free trading tool comes to us from Henry Carstens (@VerSol) over at Vertical Solutions. Henry does a lot of great, innovative work within the realm of market derived statistical analysis. But trading is not just an academic pursuit for Henry, he is also a trader. With his Profit and Loss Forecasting Tool, Henry has created a freely available tool traders can use to statistically evaluate their trading results.
From his site, Henry describes the P&L Forecaster:
The P&L Forecaster is for discretionary and automated traders who wish to forecast their future P&Ls and gain insight and understanding into their edge in the markets.
The Forecaster is based on the average win, win percentage and win/loss ratio of trades for a trader, trading system or portfolio. The path is generated using a normal distribution (bell curve) around the inputs.
To use the P&L Forecaster, enter the average win, percent wins and win/loss ratio and press “Forecast”.
For example, to get a two year P&L forecast, enter statistics from your historical weekly results. The forecast will then correspond to the next 100 weeks of trading.
It’s super easy to use and is a great way to dig a little into your own trading patterns. A great weekend exercise, you know, as you review that staggering collection of monster green days you had this week. Because you wouldn’t keep checking your P/L sheet while you trade, right? 
Henry also reminds everyone:
Running the Forecaster multiple times will yield different paths to similar forecasts.
There is as much information in the path and its slope as their is in the endpoint; remember it’s a forecast and not a guarantee.
and we will remind as well: the forecast results are for educational purposes and do not reflect or guarantee future trading results.
Also be sure to read Henry’s post on small edges. Still not sure why you need this in your life? No worries. Dr. Brett has written about it a few times, so maybe he can help shed some light on the ways you can use this tool to enhance your own trading game.
Go check it out, read up on what Brett thinks of it, and run your own series of tests on the P&L Forecaster.
Hope you enjoy this week’s free trading tool … have a great weekend!
