Suppose you're a baseball coach and your team has bases loaded in the last inning with one out. Your team is losing by one run, and it's the playoff game that will determine who will go the World Series. Who would you want to send to the plate?
You'd want someone who can put a bat to the ball, who is least likely to strike out in this situation. But how would you know who that would be? You could rely upon subjective impressions, or you could keep detailed statistics regarding the performance of your hitters in a variety of situations. If you know that one of your hitters is most likely to hit the ball out of the infield against a right handed pitcher and least likely to strike out with men on base, that might be your choice. You would want any possible statistical edge on your side.
As Diego points out in his market student site, and as Victor Niederhoffer and Laurel Kenner stressed in their site and Practical Speculation book, a large part of successful trading and investing is avoiding the behavioral biases embedded within subjective impressions by grounding oneself in probabilities.
How is your trading performance in range markets? Trending ones?
How does your performance vary as a function of time of day? Day of week?
How does your performance vary as a function of the size you trade?
Do you trade certain stocks, sectors, indexes, or asset classes more successfully than others?
Do you trade better from the long or short side?
What holding periods are associated with your most successful trades?
If you are your own trading coach, you make the decision of who to send up to bat each day. If you don't know what you don't know, you'll likely send the wrong hitter and strike out with the bases loaded.
It is difficult to play to your strengths if you're not aware of them in the first place.
It is difficult to improve your performance if you don't first have a baseline.
It's the look inside your P/L performance that will ultimately make you a more successful trader. That's where you can work around your weaknesses and take fullest advantage of your strengths.
Spare me the "passion for trading"; too many of those people are trading junkies. Successful people sustain a passion for self-improvement. This post will help traders who choose that path; this post will get you started in the right direction; and the trading coach book is designed to help you sustain your self-development.
Whatever you choose in life, be the best you can be. Life's too short--and you're too important--to compromise.