Make your pay and end for the day?
- Thread starter 8hcap
- Start date
Any time I force or press it certainly has a regrettable outcome. And I trade several thousand futures contracts per day.
When I am up good money for the day, I cut my size in half and continue to trade. If I have two bad trades in a row, I walk.
If you're up money, press, and give it back, it is psychologically debilitating. Remember, the law of averages and statistics comes into play, and your job as a trader is to skew those odds in your favor - that's an edge. Money management is a big part of that. Money manangement is as important as technical analysis.
When I am up good money for the day, I cut my size in half and continue to trade. If I have two bad trades in a row, I walk.
If you're up money, press, and give it back, it is psychologically debilitating. Remember, the law of averages and statistics comes into play, and your job as a trader is to skew those odds in your favor - that's an edge. Money management is a big part of that. Money manangement is as important as technical analysis.
I'm not a big fan of daily goals, I'd rather hit a monthly target. The reason for this is you never know how the rest of the day will go. There could be news that will provide a substantial profiting opportunity which can help offset some of those losing days.
Ifyou get to a point in the day where you are comfortable with the profit, then cut your size in half, and keep trading. But don't allow yourself to lose more then 20 - 30% of your closed P&L. This way you will build confidence in trading at all times during the day.
Same thing when your losing, instead of stopping, cut your size in half, and in half again if you keep losing. This way, if you get to a point in the day where things start to work, you can resize back to your original size, and potentially make back your losses, or even go positive. At a minimum the smaller size trades won't aggrevate your losses too much further.
There have been many days where I've wanted to leave cause I've made more then my avg daily P&L, but was ahppy I stayed cause I made alot more. Even on the days where things just went dead, I managed to keep the majority of that profit. But it helped me alot to stay and learn how to trade at lunch, through sideways markets, and through big reversals.
Ifyou get to a point in the day where you are comfortable with the profit, then cut your size in half, and keep trading. But don't allow yourself to lose more then 20 - 30% of your closed P&L. This way you will build confidence in trading at all times during the day.
Same thing when your losing, instead of stopping, cut your size in half, and in half again if you keep losing. This way, if you get to a point in the day where things start to work, you can resize back to your original size, and potentially make back your losses, or even go positive. At a minimum the smaller size trades won't aggrevate your losses too much further.
There have been many days where I've wanted to leave cause I've made more then my avg daily P&L, but was ahppy I stayed cause I made alot more. Even on the days where things just went dead, I managed to keep the majority of that profit. But it helped me alot to stay and learn how to trade at lunch, through sideways markets, and through big reversals.
Yes, I do that, but in a flexible way.
If I've made $500 in the morning, I do return for another couple of trades in the afternoon. If I'm this lucky again in the afternoon, I quit for good (take a nap.) If the day is hard and around 2 pm I have $500, I do stop and leave my office.
For those of you who have not done the statistical analysis behind this approach, I do recommend you do that - the results are really enlightening.
If I've made $500 in the morning, I do return for another couple of trades in the afternoon. If I'm this lucky again in the afternoon, I quit for good (take a nap.) If the day is hard and around 2 pm I have $500, I do stop and leave my office.
For those of you who have not done the statistical analysis behind this approach, I do recommend you do that - the results are really enlightening.
Personally I trade every valid signal my system gives me, since I have no idea which one will be the next big one. Setting cash figures is pointless to me, since I'll trying to "make something happen" , when there might not be anything there. Just focus on trading your signals and if you make money, great. If not, so be it.
I do agree with Nihabasha .. there are times in the day where your system doesn't perform as well. For most people, it is lunch time - 11:30 to 1:30 , as there is little followthrough, little momentum and lots of chop. Most people are better served just to skip this time frame.
I do agree with Nihabasha .. there are times in the day where your system doesn't perform as well. For most people, it is lunch time - 11:30 to 1:30 , as there is little followthrough, little momentum and lots of chop. Most people are better served just to skip this time frame.