Auditing the trades
A learning portfolio which is much important aspect of medical education and currently improving in adoption across institutions in India. It is not something much different from journal's used by doctors in the last century and before. Analyzing the qualitative and quantitative data gives rise to insights and hypotheses and even helps to improve pattern recognition (both conscious and subconscious/intuition-based). Reflective learning is the most important aspect of creating a learning portfolio and I try to do the same using this blog as a learning portfolio.
Having a trading journal, analyzing why a trade is taken, what was the risk-reward and the outcome understanding it more by reflective learning and gaining insight is of similar high value in both domains. When this data is recorded and checked at the end of day/week/month along with P&L (preferably at month-end), it's auditing the trades and similarly in medicine also clinical audits are done which helps in improving the clinical outcomes.
Somewhat related to the risk-reward of a trade is the NNT and NNH data of an intervention. Based on the scenario we select risk and reward ratio while taking a trade, and similarly based on clinical scenario we select an intervention with an appropriate risk-reward ratio i.e. NNT , NNH and proceed with hope.
Sometimes the scenarios are unclear in trades and it's easy to not trade at that moment/time/day where there is an opportunity cost as a loss but may prevent a much bigger loss, but in medicine when the scenarios are unclear as in complex or rare undiagnosed cases, ignoring complexity is same as opportunity cost loss, but failing to find a diagnosis or suitable intervention is a helpless scenario. Hopefully, the more learning around patient-centred way and accessibility to those learning portfolios will help many more as have been already helping in a slower way by case reports published in journals.
full blog series here - https://classworkdecjan.blogspot.com/2021/07/trading-and-medicine-analogy-complexity_52.html
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