Daytrading the whole session versus calling it a day after reaching a profit target?

[Overnight]

...

a) Stop trading completely after reaching a profit goal - while continuing to watch the market and/or simulator trading the rest of the session

b) Decrease size significantly after reaching a profit goal, but still trading the rest of the session. Example being if I normally trade 1 ES - I can then trade 1 MES.

c) Another alternative could be to have a peak-to-bottom drawdown rule to ensure 'green days'. For example, if I'm up 5 points - allow one more trade with a maximum risk of 3 points to ensure the day ends green. If stopped, I'm up 2 points for the day and still profitable.
...

This is a quandary many face, yes. It is a complex psychological issue which only you will be able to sort out.

There have been many days where if I stopped at my "daily profit goal", I would have missed out on even more profit had I not simply continued with a few more trades. On other days, I have given many of the gains back by NOT stopping at the daily PT.

There have been days where I if I had stopped trading after reaching the "daily loss limit", I would not have been able to dig myself out of the hole and end up in profit. But also dug myself further into the hole by continuing to trade.

And there is then all manner of variations in between such as time of day, mood, light levels, aromas, music, market PA, etc etc ad nauseum that affect your trading.

It is up to you to figure out what works for yourself, and your personality. But you've picked a hell of a time to work through these issues, because volatility these past three weeks has rarely been seen in such a concentrated time-frame. Be well and use caution!

 

[SimpleMeLike]

Also according to 80/20.
80% percents of the returns happen 20% of the time.
You better be here during the hunting season and prepare for hibernation.

It's not required to be 100% behind your screen.
Just keep an eye on it from time to time.
Plan in advance and be ready.
If not automated ...

Sekiyo,

This is a good point you mentioned. Many times, I take my daily profit goal of $200, shutoff, only to come back to the screen 1 hour and see about 3 more trades that could have made money. .

 

[KCalhoun]

There have been many days where if I stopped at my "daily profit goal", I would have missed out on even more profit had I not simply continued with a few more trades. On other days, I have given many of the gains back by NOT stopping at the daily PT.

There have been days where I if I had stopped trading after reaching the "daily loss limit", I would not have been able to dig myself out of the hole and end up in profit. But also dug myself further into the hole by continuing to trade.

And there is then all manner of variations in between such as time of day, mood, light levels, aromas, music, market PA, etc etc ad nauseum that affect your trading.

It is up to you to figure out what works for yourself, and your personality. But you've picked a hell of a time to work through these issues, because volatility these past three weeks has rarely been seen in such a concentrated time-frame. Be well and use caution!

Great points... a very useful idea is to trail stop on open profits, eg if I'm up 800 I stop trading if I get back to up 600.

There's Nothing more frustrating than to be up 1k at 10am and get cocky, overtrade marginal setups later and end the day down -$300.

I learned that from poker cash games, if I double a $500 buyin I rack 700 and cash the chips, then play with remaining 300, type of approach. Took years to learn that.

I train traders in these strategies daily in my www.tradingtheopen.com live room, celebrating 20 years in business.

 

[Howard]

This is what has stood the test of time for me:
- 1 trade per day per market (enforces discipline)
- stop based on % of average range
- exit on close unless stopped out

Profit targets, trailing stops, moving stop to b/e, scaling out...all reduce returns. They feel good but cost money. Keep it simple. You need the 1-2 days a month where you nail a trend day from open-close. The other days are a grind of stop outs and small profits.

Good post.

Reducing trading frequency and being selective is very important.

I don't think a daily profit goal makes nailing a trend day impossible.

3. I stop trading as soon as I become emotionally compromised (I am a fan..), as I already was around 9:38 this morning.
4. Repeat, when emotions, reason and intuition, are on the same (good) page, same day, same week or even same month.

Self awareness and self regulation are the key for me, and that defines the duration of my trading sessions.

This is great. And so true.

Thanks for the reminder here.

 

[Howard]

There have been many days where if I stopped at my "daily profit goal", I would have missed out on even more profit had I not simply continued with a few more trades. On other days, I have given many of the gains back by NOT stopping at the daily PT.

There have been days where I if I had stopped trading after reaching the "daily loss limit", I would not have been able to dig myself out of the hole and end up in profit. But also dug myself further into the hole by continuing to trade.

Thank you for your post. I recognize myself in all of these - even the digging myself out of the hole to end the day green after first exceeding my daily maximum loss. But I don't like that one as it's basically rewarding bad behaviour and could just as well end the other way, i.e., further drawdown. Actually, that happened with me last week.

At the end of the day, it's not easy to find an answer to this, but in the long run, I think I would prefer daily consistency even if it's a modest daily gain of 2 points versus a wild equity curve with huge up days and huge down days.

Even if the latter would come out ahead by day 100, I think I'd prefer the former.

I'm thinking that I will probably utilize some kind of profit goal, but allow for another trade after taking a break and putting a maximum drawdown on open profits. I.e., if I'm up 6 points for the day, I can take another trade, but never risk more than say 3 points. If that can't be done, then I'm done for the day.

In time, as my experience and mental stamina grows, hopefully I can trade the full session in 'machine mode'.

 

[SimpleMeLike]

This is what has stood the test of time for me:
- 1 trade per day per market (enforces discipline)
- stop based on % of average range
- exit on close unless stopped out

Profit targets, trailing stops, moving stop to b/e, scaling out...all reduce returns. They feel good but cost money. Keep it simple. You need the 1-2 days a month where you nail a trend day from open-close. The other days are a grind of stop outs and small profits.

Hello zentrader,

Thanks for your input. I am experimenting with all you mentioned above (profit targets, trailing stops, moving stop to b/e...) and it is some work indeed. I have thought about the 1 or 2 trades per day approach.

Which time frame of average range are you referring to?

Thanks