$500/day
- Thread starter parabolic
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I tend to side with those who believe hard targets create more problems than they solve. Markets are fluid and dynamic. You cannot bend the will of the market to allow you to hit a specific profit target consistently IMHO. To try to force the market and/or stay with a position longer than you might otherwise to get to a certain profit target when it just isn�t there that day or hour or minute, will cost you money in the long run, whatever it is.
While I would certainly advocate doing what helps you make the most money irregardless of what anyone tells you, I personally would recommend taking what the markets allow, push when the odds are in your favor, be more conservative when they aren�t and concentrate on your risk control. If you concentrate on limiting risk first and taking just what the market will give with your given strategy in your current time frame, over time, I think you will be very happy with your results. To artificially limit your profit potential when you have to best of it or are in the groove, will make it harder to reach the next level IMHO. Because you will lose more than you plan to on occasion or when you are out of sync with the market flow because you didn�t reduce your size recognizing this, or worse, not even notice you were a bit out of the flow.
If it is a big trend day and assuming that is your strength, why you would limit your gain when if you take advantage of conditions can greatly increase your profits, especially over the long run, i.e. your year or career. To cut those potential profits short is very limiting IMHO.
Another good reason not to focus on your daily number to hard is because there are too many variables to allow you to be successful which may hurt your confidence in the short run (a day), which is very important. A trader needs confidence in himself and his methods or he/she will breakdown mentally or not follow his rules when he needs both the most. If you are best in trending markets (or whatever your strong suit is) and it is not trending today, you cannot press to reach a daily goal or you will suffer the consequences (and then blame something else probably). Now a weekly or even better, monthly idea of how much you can aim for will allow you the best of both worlds. It would allow you to keep a trend of your performance over a time frame where the inevitable good and bad luck and good and bad connection with the flow of the market should even itself out much more so than a daily goal can. Take what the market gives you daily and weekly, then monthly track your performance. I bet it helps you.
Good trading
BM
While I would certainly advocate doing what helps you make the most money irregardless of what anyone tells you, I personally would recommend taking what the markets allow, push when the odds are in your favor, be more conservative when they aren�t and concentrate on your risk control. If you concentrate on limiting risk first and taking just what the market will give with your given strategy in your current time frame, over time, I think you will be very happy with your results. To artificially limit your profit potential when you have to best of it or are in the groove, will make it harder to reach the next level IMHO. Because you will lose more than you plan to on occasion or when you are out of sync with the market flow because you didn�t reduce your size recognizing this, or worse, not even notice you were a bit out of the flow.
If it is a big trend day and assuming that is your strength, why you would limit your gain when if you take advantage of conditions can greatly increase your profits, especially over the long run, i.e. your year or career. To cut those potential profits short is very limiting IMHO.
Another good reason not to focus on your daily number to hard is because there are too many variables to allow you to be successful which may hurt your confidence in the short run (a day), which is very important. A trader needs confidence in himself and his methods or he/she will breakdown mentally or not follow his rules when he needs both the most. If you are best in trending markets (or whatever your strong suit is) and it is not trending today, you cannot press to reach a daily goal or you will suffer the consequences (and then blame something else probably). Now a weekly or even better, monthly idea of how much you can aim for will allow you the best of both worlds. It would allow you to keep a trend of your performance over a time frame where the inevitable good and bad luck and good and bad connection with the flow of the market should even itself out much more so than a daily goal can. Take what the market gives you daily and weekly, then monthly track your performance. I bet it helps you.
Good trading
BM
Spot on Blackbook! This should be a slap in the face to most of the trading community - I could not have said it better myself.
Agreed, it's against the "let your profits run" adage. However, for day traders, capping is not a bad idea IF YOU DO IT INTELLIGENTLY:
IF I HIT +$500, I QUIT AT +$250.
IF I HIT +$1000, I QUIT AT +$750.
Something like that....makes sense.
It's effectively a trailing stop on your equity curve for the day.
Think about it.
iv been trading for years now and i think the $500 per day is too high an amount to focus on. They say the way you build up your confidence is to set your target low and consistently achieve that. My recommendation is that you set your daily goal to $50/day at the beginning of the month. Every time you hit the $50 raise your goal by $25. At the beginning of the month, if you were profitable for the month, go ahead and raise that $50 to $100. Successful traders are consistent everyday and this is a way to become consistent. When you reach your target for the day congratulate yourself, then every week have your broker send you a check for 1/2 or 1/3 of the profits you made for the week. This way you will realize that it is real money you are trading with and the rewards of trading good is receiving a paycheck weekly. When you trade bad discipline yourself, dont trade for a day as punishment, but watch the market and either sim trade or paper trade. No breaks from the market just trade between live and sim till you get to that $500/day.
I know you mean well but you are just wrong here. You are going about it the complete wrong way a trader should. You focus on improving your TRADING first, the increase in profits will be a direct result of that, not the other way around.
Noobs should NEVER have a dollar figure target per day, only a max loss per day ($100, $50, $300 whatever) until they are consistently profitable. Once a certain level of success in trading ability is there, then its time to size up a bit. Not "increase daily goals $$$ wise" but increase the size of individual trades. As a trader keeps improving over time AND increases size, profits are bound to increase.
Your advice focuses on the money and puts the trading secondary. Not the optimal way to go. Plus if you've been trading for years and can't avg $500/day then maybe you should change your mental approach. Or trade a more liquid mkt?
Noobs should NEVER have a dollar figure target per day, only a max loss per day ($100, $50, $300 whatever) until they are consistently profitable. Once a certain level of success in trading ability is there, then its time to size up a bit. Not "increase daily goals $$$ wise" but increase the size of individual trades. As a trader keeps improving over time AND increases size, profits are bound to increase.
Your advice focuses on the money and puts the trading secondary. Not the optimal way to go. Plus if you've been trading for years and can't avg $500/day then maybe you should change your mental approach. Or trade a more liquid mkt?
Well this thread was about the dollar figure per day, all i am saying is that as a beginner you need to set your sights low. if you can take baby steps then you will be successful. as you get better at trading your $$ will go up. there are many aspects to trading but this thread was about $$ targets per day. And you should be concerned about your P&L as well as risk management, and a 100 other things that we as traders have to think about.
You're right, this thread is titled $500 per day, I should not have jumped down your throat as much as I did. I guess I just disagree with the premise of the thread. I believe I even posted a while back about it.
I agree, baby steps are key. Learn to trade step by step and the profits should come as a result
I agree, baby steps are key. Learn to trade step by step and the profits should come as a result
This is a very important topic because you will always need to sacrifice when you want to take your trading to the next level. The closest analog I can imagine is increasing table limits when playing poker: you build up a stake starting at the lower limits, then take a shot at the next level up. Get pummeled, go back down a level, build the stake back up etc. When you finally succeed at that next level, you start all over again with even higher limits. Psychologically, trading is exactly the same.
One thing is for sure, if I had ever settled on making 500/day, there is no way I could have learned what I know now. You need to be willing to give that up in order to take things to the next level, because once you get beyond that you will never go back. Sure, maybe if/when you blow yourself up eventually you will have to go back to the lower limits for a while to rebuild. But trust me, you will never stay there for long, once you've seen what is possible it's only a matter of time before you try again.
The hardest part about raising your game is learning how to lose at higher figures; half your brain might be focusing on the higher target but the other half still stuck at the previous level. This is the danger zone because you are still getting accustomed to the numbers or time frame, you won't have the confidence yet that is needed to stand any kind of extended cold spell and frustration easily affects you.
I would think no one stays at 500/day for long, you either never get there or go completely past it after a while. Given the general liquidity of the most popular trading markets, a daily limit like that would be mostly just a temporary mental barrier.
One thing is for sure, if I had ever settled on making 500/day, there is no way I could have learned what I know now. You need to be willing to give that up in order to take things to the next level, because once you get beyond that you will never go back. Sure, maybe if/when you blow yourself up eventually you will have to go back to the lower limits for a while to rebuild. But trust me, you will never stay there for long, once you've seen what is possible it's only a matter of time before you try again.
The hardest part about raising your game is learning how to lose at higher figures; half your brain might be focusing on the higher target but the other half still stuck at the previous level. This is the danger zone because you are still getting accustomed to the numbers or time frame, you won't have the confidence yet that is needed to stand any kind of extended cold spell and frustration easily affects you.
I would think no one stays at 500/day for long, you either never get there or go completely past it after a while. Given the general liquidity of the most popular trading markets, a daily limit like that would be mostly just a temporary mental barrier.