Markouts: the audit that exposes everything
Posted: Fri Oct 30, 2026 12:51 pm
Markouts: the audit that exposes everything
A markout measures how the price moves after a trade. Take each fill, note the mid-price at that moment, and record the mid-price 1, 5, 10, and 60 seconds later. Average the differences, signed by direction.
If the strategy is genuinely good, the markouts are positive, and they grow over time. If the entries are mistimed, the markouts are negative at short horizons.
The pattern at each horizon says something specific. A positive markout at 60 seconds but negative at 1 second means the entries are early: price dips first and then moves in the intended direction. A positive at 1 second that fades by 60 means the signal catches a quick impulse that decays.
Comparing markouts between sessions or pairs highlights where the strategy has edge and where it doesn't. It also shows how costly slippage is.
It's a standard tool at institutional trading desks. Few retail traders use it, yet the data needed is simple: fills and a tick history.
Even a basic spreadsheet markout table gives a clearer picture of execution quality than win rate does.
For the entries in the journal, what do the one-second and ten-second markouts say?
A markout measures how the price moves after a trade. Take each fill, note the mid-price at that moment, and record the mid-price 1, 5, 10, and 60 seconds later. Average the differences, signed by direction.
If the strategy is genuinely good, the markouts are positive, and they grow over time. If the entries are mistimed, the markouts are negative at short horizons.
The pattern at each horizon says something specific. A positive markout at 60 seconds but negative at 1 second means the entries are early: price dips first and then moves in the intended direction. A positive at 1 second that fades by 60 means the signal catches a quick impulse that decays.
Comparing markouts between sessions or pairs highlights where the strategy has edge and where it doesn't. It also shows how costly slippage is.
It's a standard tool at institutional trading desks. Few retail traders use it, yet the data needed is simple: fills and a tick history.
Even a basic spreadsheet markout table gives a clearer picture of execution quality than win rate does.
For the entries in the journal, what do the one-second and ten-second markouts say?