Calling it a day after reaching a profit target?

Hey did you ever think that small PF and low statistical confidence is your problem? What about not trading unless your live results can offer what you want. If you are worried about breaking even during the latter part of the day, perhaps you need to examine your numbers. You might be running a break even strat.

This information has been on ET since forever, regarding if you should trade or not; it depends on your expectancy.

Are you discretionay trader may I ask? Im just saying that the most common failure combination is discretionary ES trading. Not to say you cant do it.
 
Quote from Eddiemorra:

I always thought that, assuming you have a true edge, you should just keep trading and not limit your potential profits for the day.
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Yes.

From a mathematical and mechanical point of view, this is true. If you flip a coin 10 times, it is possible to get 10 heads in a row, even though the probability of heads/tails is still 50%. But if you flip a coin thousands or millions of times, you will end up with heads and tails equally distributed. It`s called the law of large numbers.

It`s the same with any trading system. You might have a 70% win probability, but that does not mean that your next 7 trades will be winners followed by 3 losers. You don`t know the distribution in advance. But with a large sample of trades, you may realize that 70% win probability in the long run.

However, this assumes mechanical execution, IMO.

With discretionary trading, and especially day trading, IMO, your recent wins and losses will affect your edge (by disturbing your psychological state).

For me, taking a hit or a win, does not prevent me from executing the next trade. That`s good. On the contrary, I tend to over trade and take too many trades. If I win, I get less selective about my trades and get greedy. If I lose, I tend to want it back.

Actually, there have been several days recently where I was in the red and fought myself back to the green.

I understand and respect all your arguments, but I still think this might be a good idea. Remember, I will still be following the markets in the simulator and try to trade like I would real money. In time, I can taper off and start executing every trade.

Baby steps? :)
 
Why don't you automate?

ES

Quote from Laissez Faire:

Yes.

From a mathematical and mechanical point of view, this is true. If you flip a coin 10 times, it is possible to get 10 heads in a row, even though the probability of heads/tails is still 50%. But if you flip a coin thousands or millions of times, you will end up with heads and tails equally distributed. It`s called the law of large numbers.

It`s the same with any trading system. You might have a 70% win probability, but that does not mean that your next 7 trades will be winners followed by 3 losers. You don`t know the distribution in advance. But with a large sample of trades, you may realize that 70% win probability in the long run.

However, this assumes mechanical execution, IMO.

With discretionary trading, and especially day trading, IMO, your recent wins and losses will affect your edge (by disturbing your psychological state).

For me, taking a hit or a win, does not prevent me from executing the next trade. That`s good. On the contrary, I tend to over trade and take too many trades. If I win, I get less selective about my trades and get greedy. If I lose, I tend to want it back.

Actually, there have been several days recently where I was in the red and fought myself back to the green.

I understand and respect all your arguments, but I still think this might be a good idea. Remember, I will still be following the markets in the simulator and try to trade like I would real money. In time, I can taper off and start executing every trade.

Baby steps? :)
More...
 
Quote from gkotopou:

I would hide your pnl entirely. Just execute. Trade based solely on your methodology, if you remove the element of money and just focus on the trade - I'm sure when you glance at your pnl at the end of the day you will see better results. I believe psychologically most guys who are concious of being down or up money are more likely to gamble than just trade. Try it with small lots see how you do.
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Yeah, I make it a point to not watch my P&L and it is not visible at a glance. However, it`s not too hard to figure out where I`m at, since it is fairly simple mathematics that I execute in my head without even thinking about it :p

That said, there have been days where I was not really sure about my P&L before checking it at the end of the day, because I was in the zone and trading. I would know that I were ahead, but not exactly by how much.
 
Quote from DGunz:

Hey did you ever think that small PF and low statistical confidence is your problem? What about not trading unless your live results can offer what you want. If you are worried about breaking even during the latter part of the day, perhaps you need to examine your numbers. You might be running a break even strat.

This information has been on ET since forever, regarding if you should trade or not; it depends on your expectancy.

Are you discretionay trader may I ask? Im just saying that the most common failure combination is discretionary ES trading. Not to say you cant do it.
More...

Actually, I`ve been thinking about this a lot. Especially during a self-destructive and self-loathing period I went through after my last losing streak. Luckily, it only lasted for a few days :)

I do think that my analytical abilities are good enough that I should get ahead in the long run if I follow the plan. Not saying that I can`t improve, but I`m definitely not trading from the hip when I`m trading well.

Yes, I`m a discretionary trader.
 
I actually agree with limiting the number of trades per day. I don't believe that there are tons of winning trades. Instead there may be 4 good setups per day.

Now if you have say a stop limit of $ 300, that means you may only be able to take 1 - 2 winning or losing trades before quitting.

However, if after that you could trade in Sim to gain more confidence.

You could also look at scaling in and out as part of taking more trades.

After that you could look to sim trade to see how you would have done the rest of the day.
 
Quote from Laissez Faire:

since it is fairly simple mathematics that I execute in my head without even thinking about it :p
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Lays, read this line and just think about it for a minute. Do you see? It is in the back of your mind you should only be 'thinking' about executing the plan. trading is easy, but losing money is hard. someone suggested automating which may or may not suit you but could help you with this.
 
Quote from Laissez Faire:


Yes, I`m a discretionary trader.
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That's your problem. You need one of the set it and forget it systems used by the by the hundreds of profitable traders here.

Just turn it on at 9:30 , and count the money as it rolls in.
 
KingDong130 Is right,

You should implement a percentage that you are willing to give back. A business won't stop making their product simply because they made money on it. Take a break, walk away, go outside--the market will be there when you get back.
 
Quote from ElectricSavant:

Why don't you automate?

ES
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Quote from stock777:

That's your problem. You need one of the set it and forget it systems used by the by the hundreds of profitable traders here.

Just turn it on at 9:30 , and count the money as it rolls in.
More...

Well, I really don`t have any knowledge about automation at this point and I`m not even sure how I could automate it as I don`t use any indicators in my trading.

This is something I would love to do in the future, but currently I think I need to work on my market understanding, before I can make an automated system from my methodology.

Quote from gkotopou:

Lays, read this line and just think about it for a minute. Do you see? It is in the back of your mind you should only be 'thinking' about executing the plan.
More...

You`re right. My focus should be on the market, not my PnL. Not always easy to do :)

Quote from Mr. Tenacity:

KingDong130 Is right,

You should implement a percentage that you are willing to give back. A business won't stop making their product simply because they made money on it. Take a break, walk away, go outside--the market will be there when you get back.
More...

Yeah, this might be the best solution. For example, if I`m up 5 points, I can still trade, but will not go below 2 points, giving me 1-2 trades.

Thanks KingDong :)
 
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