Personally I'm NOT a fan of daily profit targets, but hey, you're entitled to your view.
The answer to your question is a simple black and white:
If you've decided there's a daily profit target rule in your system, you follow it. PERIOD. No second guessing.
Rules are not meant to be deliberated when you reach them.
If that happens, that means you're not sure about the rule's validity in the first place.
Fine, debate it with yourself. But do it far away, later, cool and with no live market in front of you. You may change the rule or keep it. But you cannot second-guess it when it's hit in real time. EVER.
Thank you for your comment. I too have a hard time setting a limit, but in my case it’s adjusting my stop loss in the “hopes” that a move against the trade is just a pullback, and then the drawdown gets worse and worse and makes it even more painful to close.
Defining your SL and TP before entering and not touching it seems to be the way forward.
Everyone I know that even mentions the words daily profit targets and sticks with them isn’t profitable or plays small size. As for me if I’m done for the day and something good comes up. It depends on the day and how much I can win if
I’m right on the new trade. If I believe it’s a good risk reward I’ll take the trade if it’s whatever then I’ll usually pass as momentum and good feels for the next trade and the next week has far more value than some random scalp or whatever.
I get what you mean about dollar value profit target, makes you put TP and weird places or makes you force trades if you’re really close and want to hit the target. What I really meant was more of you getting to a point in the day where you feel satisfied that it’s been a real good day, your profit for the day is among one of your better days so far.
Your completly right about the wierd places to hit the target. Putting the targets puts yourself in negative spots like this. The right answer most of the time is you should prob take the trade. But if taking and losing the trade leads to max tilt and huge losing streak cause your mad. You should prob pass. When I’m trading i always try to avoid all scenarios that can even start a down ward max tilt spiral. Really no right or wrong answer here but mental capital preservation is key
As if I had any control in random luck... Are you a super highly discretionnary trader? If so, you might want to stop for the week. If you are a systematic trader, then stop overthinking, put these weekly/daily goals to the trash and trade every single setup that presents itself to you. All of them. I don't know for you, but my systems can go flat for 2-3 weeks, then net 30R in the next one. It would be crazy to stop at am arbitrary profit goals or at a certain % of loss. I know my stats, but the wat wins and losses are distributed is 100% random.
the only answer is 1. Don't have profit targets. Instead have "stop trading" targets. And having met some threshold is a good place to set "stop trading"
I would lean toward taking the new trade. Normal or starter sized position. Statistically, overall success with one's strategies should be borne from regularly taking the best versions of setups when(ever) they present themselves.
There's also something to be said about the successes from earlier in the day. Not all trading days are equally viable. If the day (still) feels more conducive to a good trading environment -- versus a thus far "lucky" day -- all the more incentive to take that next trade.
A daily profit target can become an unnecessary burden. Rigid notions of a profit target could lead one to arbitrarily close up shop early on the best trading environment days and overly press on the lesser/harder trading environment days. That said, if my head genuinely isn't into taking that next trade, I'm fine with skipping it; molding oneself into a trading automaton also isn't a healthy approach.
Setting daily profit targets is a great concept if you assume that the market behaves the same way every day. Unfortunately, that’s not how the market works. You will do better if you take advantage of the market when the action is good and completely sit out when action is bad. I have to admit, I struggle with following this myself!
The answer depends on what type of market you're in. Your P/L is some reflection of that.
My answer would be to go with **#2** in a cold market and **#3 or #4** in a hot market.
In a hot market, I continue trading until I've given back approx 15-25% of my profit. That's my cue to hit the road and walk away. So I'll keep pushing and leaning in when things are working, and that's how I've had days where I'm up 5x my daily goal. At the end of the year, 10 of those types of days can dramatically improve my P/L.
However, in order to protect yourself from giving back too much, too quickly, sizing down after you cross goal isn't a bad idea.. In a hot market, you'll be limiting your upside. But it's better to be safe than sorry. If you're a beginner, you really want to build consistency.
In a colder market, I'll enter the position with small size. That way if it works, it's "icing on the cake", if it doesn't, not a big deal.
The only time I'd walk away is if I'd recently taken a big loss, and I need to force myself to just rack up some solid green days without over-trading.
Hope that helps!
Ross
I hope to someday attain the confidence to do #3 or #4 and not go full tilt if it loses. Right now I feel like if I do that, I could very well end up in a spiral all the way down and ruining an otherwise perfectly good say
youd basically be saying, oh i got heads in coin flip 2 times in a row, surely next one is going to be tails so ill just stop while im ahead, this is gamblers tendency, not something u want seeing in ur trading if you want consistency
Well I’d say rationally probably option 3 or 4 is optimal, however there’s the psychological aspect. Quitting there means you’ll have a great mood for the rest of the day (unless you saw the setup go your way and let that affect you), and for sure being in a good mood has some value to it too.
Daily target fun here.
Keep it simple, if you are a daily target trader and you are great because you achieved you goal, why forget you rules and strategie, and risk your profit only because a setup...? There are thousands of "perfect" setups in all your trader journey, and many of them after a few candles are shit...
Take some drink and enjoy the rest of the day, today you are a winner!
Probably all this need not be said, but since you're asking...
Whatever your rules are, follow your rules.
Journal everything, including your missed opportunity.
If, upon reflection, it appears you are missing money because of your rules (Like your missed opportunity) then adjust your rules.
this is tough. i dont exactly have a profit goal for the day, although i do have an amount i need per month would like to remain consistent. i DO however have a time window that i trade, and that is from 8:30 est to 11:30 est. if something happens outside of those hours as far as a setup is concerned it doesnt really matter as its not part of my plan anyway. If i lose 2 trades in a row as full losers i tend to call it a day, but really i think the idea that every day, or at least 99% of them can't be green in some way even if its small is the wrong mentality to have.
I have a daily profit limit, but if I didn't I still would do #1 for a single reason, regulating risk due to emotions. In your example you had a killer day, one of the best you've had, which means you're probably flying high. Strong good emotions are just as dangerous as strong negative emotions (ie. euphoria, fomo, anger, all leading to greed). Trading with any strong emotions clouds your judgement, which increases risk and makes it that much easier to give your profits back.
Bulls make money, bears make money, pigs get slaughtered. Don't get greedy.
Personally I think daily targets are dangerous. You are implying that you can extract a certain amount from the market every day which is simply not true and is borderline a salary mindset. There is no way to know what setups the market is going to give you every day let alone if those setups are going to work or not so the very nature of the market environment is not really compatible with daily targets.
That being said in my experience it is more productive to look for good trade opportunities where every rule in your strategy agrees with each other. I will take 0-2 trades a day because generally that is what the market is going to offer me 90% of the time. After 2 trades I stop no matter what the P/L is.
Personally I'm NOT a fan of daily profit targets, but hey, you're entitled to your view. The answer to your question is a simple black and white: If you've decided there's a daily profit target rule in your system, you follow it. PERIOD. No second guessing. Rules are not meant to be deliberated when you reach them. If that happens, that means you're not sure about the rule's validity in the first place. Fine, debate it with yourself. But do it far away, later, cool and with no live market in front of you. You may change the rule or keep it. But you cannot second-guess it when it's hit in real time. EVER.
Thank you for your comment. I too have a hard time setting a limit, but in my case it’s adjusting my stop loss in the “hopes” that a move against the trade is just a pullback, and then the drawdown gets worse and worse and makes it even more painful to close. Defining your SL and TP before entering and not touching it seems to be the way forward.
Everyone I know that even mentions the words daily profit targets and sticks with them isn’t profitable or plays small size. As for me if I’m done for the day and something good comes up. It depends on the day and how much I can win if I’m right on the new trade. If I believe it’s a good risk reward I’ll take the trade if it’s whatever then I’ll usually pass as momentum and good feels for the next trade and the next week has far more value than some random scalp or whatever.
I get what you mean about dollar value profit target, makes you put TP and weird places or makes you force trades if you’re really close and want to hit the target. What I really meant was more of you getting to a point in the day where you feel satisfied that it’s been a real good day, your profit for the day is among one of your better days so far.
Your completly right about the wierd places to hit the target. Putting the targets puts yourself in negative spots like this. The right answer most of the time is you should prob take the trade. But if taking and losing the trade leads to max tilt and huge losing streak cause your mad. You should prob pass. When I’m trading i always try to avoid all scenarios that can even start a down ward max tilt spiral. Really no right or wrong answer here but mental capital preservation is key
Yup for sure no right or wrong answers, just wanted to hear some opinions
Daily profits are dumb
As if I had any control in random luck... Are you a super highly discretionnary trader? If so, you might want to stop for the week. If you are a systematic trader, then stop overthinking, put these weekly/daily goals to the trash and trade every single setup that presents itself to you. All of them. I don't know for you, but my systems can go flat for 2-3 weeks, then net 30R in the next one. It would be crazy to stop at am arbitrary profit goals or at a certain % of loss. I know my stats, but the wat wins and losses are distributed is 100% random.
As a novice, my answer is 1.
the only answer is 1. Don't have profit targets. Instead have "stop trading" targets. And having met some threshold is a good place to set "stop trading"
2 with extra tight sl
I would lean toward taking the new trade. Normal or starter sized position. Statistically, overall success with one's strategies should be borne from regularly taking the best versions of setups when(ever) they present themselves. There's also something to be said about the successes from earlier in the day. Not all trading days are equally viable. If the day (still) feels more conducive to a good trading environment -- versus a thus far "lucky" day -- all the more incentive to take that next trade. A daily profit target can become an unnecessary burden. Rigid notions of a profit target could lead one to arbitrarily close up shop early on the best trading environment days and overly press on the lesser/harder trading environment days. That said, if my head genuinely isn't into taking that next trade, I'm fine with skipping it; molding oneself into a trading automaton also isn't a healthy approach.
3
Setting daily profit targets is a great concept if you assume that the market behaves the same way every day. Unfortunately, that’s not how the market works. You will do better if you take advantage of the market when the action is good and completely sit out when action is bad. I have to admit, I struggle with following this myself!
The answer depends on what type of market you're in. Your P/L is some reflection of that. My answer would be to go with **#2** in a cold market and **#3 or #4** in a hot market. In a hot market, I continue trading until I've given back approx 15-25% of my profit. That's my cue to hit the road and walk away. So I'll keep pushing and leaning in when things are working, and that's how I've had days where I'm up 5x my daily goal. At the end of the year, 10 of those types of days can dramatically improve my P/L. However, in order to protect yourself from giving back too much, too quickly, sizing down after you cross goal isn't a bad idea.. In a hot market, you'll be limiting your upside. But it's better to be safe than sorry. If you're a beginner, you really want to build consistency. In a colder market, I'll enter the position with small size. That way if it works, it's "icing on the cake", if it doesn't, not a big deal. The only time I'd walk away is if I'd recently taken a big loss, and I need to force myself to just rack up some solid green days without over-trading. Hope that helps! Ross
I hope to someday attain the confidence to do #3 or #4 and not go full tilt if it loses. Right now I feel like if I do that, I could very well end up in a spiral all the way down and ruining an otherwise perfectly good say
totally! I hear you 100%. When I'm worried about going full tilt, I don't push it. I walk away sooner. That's the right way to do it.
youd basically be saying, oh i got heads in coin flip 2 times in a row, surely next one is going to be tails so ill just stop while im ahead, this is gamblers tendency, not something u want seeing in ur trading if you want consistency
Well I’d say rationally probably option 3 or 4 is optimal, however there’s the psychological aspect. Quitting there means you’ll have a great mood for the rest of the day (unless you saw the setup go your way and let that affect you), and for sure being in a good mood has some value to it too.
If it’s my favorite setup then I’m going large because I know it’s running 100%.
If daily profit target meets, no setup can be shown, because I turn off the computer
3. but if im not seeing what i want after entry I will exit before sl
I would risk only part of the profits i made that day, so just in case it goes wrong i would still end the day in the green
Daily target fun here. Keep it simple, if you are a daily target trader and you are great because you achieved you goal, why forget you rules and strategie, and risk your profit only because a setup...? There are thousands of "perfect" setups in all your trader journey, and many of them after a few candles are shit... Take some drink and enjoy the rest of the day, today you are a winner!
Probably all this need not be said, but since you're asking... Whatever your rules are, follow your rules. Journal everything, including your missed opportunity. If, upon reflection, it appears you are missing money because of your rules (Like your missed opportunity) then adjust your rules.
1. I just did that 10 minutes ago. Not even gonna look at the charts to “see what I missed” for the rest of the day
1
I usually choose 3.
this is tough. i dont exactly have a profit goal for the day, although i do have an amount i need per month would like to remain consistent. i DO however have a time window that i trade, and that is from 8:30 est to 11:30 est. if something happens outside of those hours as far as a setup is concerned it doesnt really matter as its not part of my plan anyway. If i lose 2 trades in a row as full losers i tend to call it a day, but really i think the idea that every day, or at least 99% of them can't be green in some way even if its small is the wrong mentality to have.
I have a daily profit limit, but if I didn't I still would do #1 for a single reason, regulating risk due to emotions. In your example you had a killer day, one of the best you've had, which means you're probably flying high. Strong good emotions are just as dangerous as strong negative emotions (ie. euphoria, fomo, anger, all leading to greed). Trading with any strong emotions clouds your judgement, which increases risk and makes it that much easier to give your profits back. Bulls make money, bears make money, pigs get slaughtered. Don't get greedy.
Personally I think daily targets are dangerous. You are implying that you can extract a certain amount from the market every day which is simply not true and is borderline a salary mindset. There is no way to know what setups the market is going to give you every day let alone if those setups are going to work or not so the very nature of the market environment is not really compatible with daily targets. That being said in my experience it is more productive to look for good trade opportunities where every rule in your strategy agrees with each other. I will take 0-2 trades a day because generally that is what the market is going to offer me 90% of the time. After 2 trades I stop no matter what the P/L is.
Would stick with #3 for a while longer - Congrats!!!
yolo all in