Mistake Made Trading Outside System Rules.

SimpleMeLike

SimpleMeLike

Hello,

I spend 2 hours reading threads on "setting daily profit goals" I concluding the follow for my problems and how daily goals without proof of outcome can lead to issues.

I hope my problems help someone else.

Please respond with if you agree or not to my logic regarding setting daily profit target goals and newbie mindset thinking.

I have a system (I backtested as such) that states "follow the rules and take ALL trade setup from 8am to 1pm on the CL and positive expectancy will return over time"

My Problems/Mistakes:
1. I would stop trading the system when I reach daily $150 profit target. Then go to hesitate, scared fear of returning profits, on other system trade setups for the rest of day. I got this daily profit from yearly profit goal of $35k. 252 trading days x $150.

2. Because I work from 12pm to 8pm, i would stop trading the system at 11am on some days.

3. For my own mental personal reason, I would Stop trading the system after 3 trades. I "felt" after 3 trades it was enough for the day.

Solutions to My Problems:
1. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I stop trading after getting profit of $150 between 8:30 to 11am. Record the max I could have made per day.

2. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I take all trades between 8:30 to 11am. Record the max I could have made per day.

3. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I stop trading after 3 trades from 8 30 to 11am.

4. All 3 problems can be resolved with automating the system, but I'm personally not ready for that yet.

Sounds like alot of work, but I belive this is the only way for newbie trader who has no idea what method will provide money to do. This is better then, "i belive if I do xyz it will be better and tommorow I will start doing xyz". This is wrong wrong in my opinion.

In other words, trade the system exactly how you back test it. Know All the questions you want answered before you start back testing it.

I belive this is the only way to trade with confidence.

I welcome opinions and comments and agreement with my conclusion.
 
SimpleMeLike said:
Hello,

I spend 2 hours reading threads on "setting daily profit goals" I concluding the follow for my problems and how daily goals without proof of outcome can lead to issues.

I hope my problems help someone else.

Please respond with if you agree or not to my logic regarding setting daily profit target goals and newbie mindset thinking.

I have a system (I backtested as such) that states "follow the rules and take ALL trade setup from 8am to 1pm on the CL and positive expectancy will return over time"

My Problems/Mistakes:
1. I would stop trading the system when I reach daily $150 profit target. Then go to hesitate, scared fear of returning profits, on other system trade setups for the rest of day. I got this daily profit from yearly profit goal of $35k. 252 trading days x $150.

2. Because I work from 12pm to 8pm, i would stop trading the system at 11am on some days.

3. For my own mental personal reason, I would Stop trading the system after 3 trades. I "felt" after 3 trades it was enough for the day.

Solutions to My Problems:
1. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I stop trading after getting profit of $150 between 8:30 to 11am. Record the max I could have made per day.

2. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I take all trades between 8:30 to 11am. Record the max I could have made per day.

3. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I stop trading after 3 trades from 8 30 to 11am.

4. All 3 problems can be resolved with automating the system, but I'm personally not ready for that yet.

Sounds like alot of work, but I belive this is the only way for newbie trader who has no idea what method will provide money to do. This is better then, "i belive if I do xyz it will be better and tommorow I will start doing xyz". This is wrong wrong in my opinion.

In other words, trade the system exactly how you back test it. Know All the questions you want answered before you start back testing it.

I belive this is the only way to trade with confidence.

I welcome opinions and comments and agreement with my conclusion.
More...
You already know what to do...backtest those 3 options and follow live trading the same as testing. I never trade anything live not properly tested.
 
algofy said:
You already know what to do...backtest those 3 options and follow live trading the same as testing. I never trade anything live not properly tested.
More...
Thanks algofy,

I appreciate the response and confirmation of what I need to do.

Thanks
 
SimpleMeLike said:
In other words, trade the system exactly how you back test it.
More...


Clearly. Absolutely. And/or backtest it exactly how you know you're going to be able to trade it, anyway.

I have never really understood the "stop when you're 'x-amount' in front for the day" mentality. It seems completely illogical, to me. You have your proven edge and you should seek to apply it to the market as often as you can (is my perspective).

I accept, of course, that this isn't fully relevant to your current circumstances, in that you work from 12.00 to 8.00. And I accept that there may be some methods which only work at specific times of day (e.g. opening-range breakouts, etc.), but these are all issues you deal with by backtesting exactly what you're going to trade.

(I'll be honest and admit that I've never believed in "daily profit goals" at all, anyway: it's not my style of trading - I see myself more as taking what the market will offer me. Over a period of time, of course, that does tend to average out, but not over a day - even when you trade about 7 times per day as I sometimes do. So I kind of have a "monthly profit aim" in mind, admittedly, but that's only my average monthly profit over the last 6 months, which I work out on a monthly basis just like you'd calculate a moving average ... and I don't really care whether or not I achieve it. If I have a bigger drawdown than I've recently had, now, that is a big issue for me, because I look at everything in terms of risk-management, really, not in terms of profit.)

Anyway, I certainly agree with what you've said above. :cool:
 
SimpleMeLike said:
Hello,

I spend 2 hours reading threads on "setting daily profit goals" I concluding the follow for my problems and how daily goals without proof of outcome can lead to issues.

I hope my problems help someone else.

Please respond with if you agree or not to my logic regarding setting daily profit target goals and newbie mindset thinking.

I have a system (I backtested as such) that states "follow the rules and take ALL trade setup from 8am to 1pm on the CL and positive expectancy will return over time"

My Problems/Mistakes:
1. I would stop trading the system when I reach daily $150 profit target. Then go to hesitate, scared fear of returning profits, on other system trade setups for the rest of day. I got this daily profit from yearly profit goal of $35k. 252 trading days x $150.

2. Because I work from 12pm to 8pm, i would stop trading the system at 11am on some days.

3. For my own mental personal reason, I would Stop trading the system after 3 trades. I "felt" after 3 trades it was enough for the day.

Solutions to My Problems:
1. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I stop trading after getting profit of $150 between 8:30 to 11am. Record the max I could have made per day.

2. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I take all trades between 8:30 to 11am. Record the max I could have made per day.

3. Backtest my system (using +300 trades) again with a goal of determining overall profitability if I stop trading after 3 trades from 8 30 to 11am.

4. All 3 problems can be resolved with automating the system, but I'm personally not ready for that yet.

Sounds like alot of work, but I belive this is the only way for newbie trader who has no idea what method will provide money to do. This is better then, "i belive if I do xyz it will be better and tommorow I will start doing xyz". This is wrong wrong in my opinion.

In other words, trade the system exactly how you back test it. Know All the questions you want answered before you start back testing it.

I belive this is the only way to trade with confidence.

I welcome opinions and comments and agreement with my conclusion.
More...


one thing i can tell u about the psychology for profits and if u cant manage it u must do something about it,,, first of all u cant think profits u cant u cant specially if ur systematic, u cant watch the position and say omg this is too much money or enough money, ONCE AGAIN this is if ur systematic, u need to follow the system to where it says to exit not where u believe its a lot of money

i once struggled with this heavily 3 years ago, and it got to the point where i want to hire someone to put my trades for me and tell him to think in terms of X multiples where all he sees is enter X amount or 2X amount,,, enter here and exit here

another way to try to get over that psych is to treat ur self as an employee for ur self,,, if someone hired u and say enter at point x and exit at point y, then ur job is to do just that, regardless of the amount of money involved cuz the amount increases and decreases based on position size, whether the person is trading 10 lots or 1000 lots ur job is simply enter position size as instructed and enter trade on x and exit on y

u have to remove ur self and try to hide p/l tab if ur software allows it so that u only see the prices in the market and where u need to enter or exit,,,

another way also is to imagine as if ur someone else money, who is to say if 150 or 1500 or 15000 is a lot of money or a little?

if ur goal is to grow in terms of money u deal with whether ur own or now u must think percentage and not override ur system based on dollar amounts
 
Xela said:
Clearly. Absolutely. And/or backtest it exactly how you know you're going to be able to trade it, anyway.

I have never really understood the "stop when you're 'x-amount' in front for the day" mentality. It seems completely illogical, to me. You have your proven edge and you should seek to apply it to the market as often as you can (is my perspective).

I accept, of course, that this isn't fully relevant to your current circumstances, in that you work from 12.00 to 8.00. And I accept that there may be some methods which only work at specific times of day (e.g. opening-range breakouts, etc.), but these are all issues you deal with by backtesting exactly what you're going to trade.

(I'll be honest and admit that I've never believed in "daily profit goals" at all, anyway: it's not my style of trading - I see myself more as taking what the market will offer me. Over a period of time, of course, that does tend to average out, but not over a day - even when you trade about 7 times per day as I sometimes do. So I kind of have a "monthly profit aim" in mind, admittedly, but that's only my average monthly profit over the last 6 months, which I work out on a monthly basis just like you'd calculate a moving average ... and I don't really care whether or not I achieve it. If I have a bigger drawdown than I've recently had, now, that is a big issue for me, because I look at everything in terms of risk-management, really, not in terms of profit.)

Anyway, I certainly agree with what you've said above. :cool:
More...
Thank you Xela,

Appreciate your response.

And to be honest with you, setting Yearly Monthly Weekly profit seems very challenging and complex when trying to match that with your system expecatations.

I rather just trade all trades for my 8 to 11am window following the rules and forget the whole profit target thing in a simplicity approach.

I love simplicity. I will just let the system set my profit target goals on whatever amount money it wants to give me per day, week, month, and year. I just want to trade.
 
I started playing with the idea of...

Rather than setting a hard profit target, simply set a target of how much money I'd like to make on a particular day.

I wake up, think..."Hmm, how much do I want to make today." If I want to pay my phone bill today, my target is, well, my latest phone bill. Say $100. So hit the target and shut down trading for the day.

Expand that to monthly expenses, and say to myself..."Hmm, what are my monthly expenses in total"? So each day, work toward paying total monthly expenses. Once monthly expenses are paid for, say in two weeks time, now the trick is..."How much play money do I want? I have two weeks to make play money (or money for savings/retirement or whatever). But what if on my road to making extra money at the end of those first two weeks, that I, at end of month, wind up losing 25% of the money I made to pay monthly expenses?

It is a tough one, for sure. I have played with the daily goal thing often, but my current trading style does not allow me to set daily trading goals. If I were to try it now, I would wind up blowing the system.

So when I try to dabble in the day trade, it is not for a specific target...It is to do what I am doing, and see how much extra I could get short-term. If I gain some more? Great! If I lose more? Boo!

The amount does not matter. (I sense that Xela is in a similar boat, based on some recent responses in a thread here or there.)
 
but my current trading style does not allow me to set daily trading goals
Overnight said:
I started playing with the idea of...

Rather than setting a hard profit target, simply set a target of how much money I'd like to make on a particular day.

I wake up, think..."Hmm, how much do I want to make today." If I want to pay my phone bill today, my target is, well, my latest phone bill. Say $100. So hit the target and shut down trading for the day.

Expand that to monthly expenses, and say to myself..."Hmm, what are my monthly expenses in total"? So each day, work toward paying total monthly expenses. Once monthly expenses are paid for, say in two weeks time, now the trick is..."How much play money do I want? I have two weeks to make play money (or money for savings/retirement or whatever). But what if on my road to making extra money at the end of those first two weeks, that I, at end of month, wind up losing 25% of the money I made to pay monthly expenses?

It is a tough one, for sure. I have played with the daily goal thing often, but my current trading style does not allow me to set daily trading goals. If I were to try it now, I would wind up blowing the system.

So when I try to dabble in the day trade, it is not for a specific target...It is to do what I am doing, and see how much extra I could get short-term. If I gain some more? Great! If I lose more? Boo!

The amount does not matter. (I sense that Xela is in a similar boat, based on some recent responses in a thread here or there.)
More...


but my current trading style does not allow me to set daily trading goals




what about increase contract size to reach that goal?
 
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