Controlling greed and risk with monthly target?

Quote from a529612:

Say you set yourself a monthly target of $5k for the month. Once you hit that you'll close all or any shaky position and go home happy and think about next month. Is this a good strategy to control greed and risk so you won't turn your paper profit into a loss or force bonehead trades?
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Why limit yourself to some ridiculous arbitrary amount??? It's even worse if you factor in the traditionally strong trading period of October-April...and the brutally slow months of July-August.

All thing considered, that is the worst "strategy" I have ever heard of.
In this business you absolutely must "make hay while the sun shines"!!!

Just my $.02 :)
 
monthly or time based profits and then shut down would look good on any system sellers list, for traders it is to catch the trend and let it run.
 
I focus more on the frequency and size of losses than I do on a P&L target. I don't watch my P&L while trading and I don't like it when any of my traders does either. It is better to consistently stay in touch with how your are flowing with the market rather than what money you are putting up. Once P&L gets into the picture, you start to watch it and count it while trading rather than staying in the flow of the market. Trading for P&L is trading scared and that is not a good thing if you are a discretionary trader. It allows you to trade to "get money back" rather than what is in front of you.

I know when I have hit a losing streak and I know it is time for a break or to stop. I prefer to always limit the downside and leave the upside uncapped.

Good luck.
 
Quote from RunTrade:

Then if you don't weigh any importance on it, how are you controlling greed and risk?? :confused:
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My weekly and monthly goals have nothing to do with managing greed and risk - thats what a strategy is for. Its a goal. Its a motivator. It keeps me from getting complacent.

In all other careers, people are encouraged to have a goal, so I don't understand why this is any different.
From the other posts here I can see that what I do is odd, and generally frowned on. All I can say is that it works for me.
 
Quote from FuturesTrader71:

I focus more on the frequency and size of losses than I do on a P&L target. I don't watch my P&L while trading and I don't like it when any of my traders does either. It is better to consistently stay in touch with how your are flowing with the market rather than what money you are putting up. Once P&L gets into the picture, you start to watch it and count it while trading rather than staying in the flow of the market. Trading for P&L is trading scared and that is not a good thing if you are a discretionary trader. It allows you to trade to "get money back" rather than what is in front of you.

I know when I have hit a losing streak and I know it is time for a break or to stop. I prefer to always limit the downside and leave the upside uncapped.

Good luck.
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So do you trade without looking at the P/L on your open positions?
 
I would really like to ask about these "psychological"... ummm... indicator type trading...

ARE YOU A PSYCHIC OR SUPERMAN????

I guess the thread starter thinks he's un-humanly special...

I can't believe how people think that the market cares about what "you" think... or you "sub(un)-consciously" know how the market will go or how you will perform in the future...

As a discretionary trader, I've never been able to predict the future.
 
How does the market know YOUR target? When you answer this question...then I put to you what does a target have to do with risk?

Your going down a dead-end path...but Thanks for the thread.

Michael B.


Quote from a529612:

Say you set yourself a monthly target of $5k for the month. Once you hit that you'll close all or any shaky position and go home happy and think about next month. Is this a good strategy to control greed and risk so you won't turn your paper profit into a loss or force bonehead trades?
More...
 
Monetary goals are a horrible idea. Your only goal should be to minimize your losses and maximize your gains. Other than that your "goals" will just f%ck your head up and and cloud your judgement.
 
It all depends on what kind of trading you do, what sort of edge or advantage you are applying to extract your profits. For some I'd think a monthly target would be arbitrary and completely useless; others might take note of the fact that what's working well now might not work so well in the near future, so for them it's not so much an explicit number but perhaps just an awareness that some sort of "trend" (in the most general sense) may be coming to an end, wherein comes the need to shift gears.

But for most traders, I'd agree that controlling greed/risk as you put it should pretty much remain consistent no matter what your current pace of profits.
 
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