Many people like to say that to invest well you only need to know basic arithmetic and while this may be true for some it is less then true for the vast majority of people trying to take money out of the markets. In fact a solid grasp of statistics will do wonders for anyones trading results.
Whether you are a macro trader, a merger arbitrage trader, or a plain old value investor you can benefit greatly by keeping trade statistics. Things like your win rate, your average win and average loss, your maximum loss and maximum drawdown, etc. These are all useful statistics to keep because they help you know what types of trades work out best for you.
As for more advanced math you can get a lot of help by using Excel but you want to keep track of your sharpe ratio as well as the sortino ratio, mar rato, ulser ratio, etc. All these numbers enable you to compare your performance on a risk adjusted basis to other strategies and to see if you re improving or going down in overall performance.
Typically a macro trader will have a really high sharpe ratio relative to a long only stock picker. Option sellers also have very high sharpe ratios but they get killed every three years or so. Yet another reason to use stats in your trading.
