What is the correct answer for a trader?

[ChaosNSX]

Agreed live in the now..

"if you have one foot in the past, and another in the future, your pissing all over the present."

Quote from cstfx:

Bottom Line it's a profit. At the end of the day, your account is that much richer. Forget about it. Next day trading. Don't get caught up in the would have's, should have's, could have's. Tomorrow is a new day.

On the reverse, if you were down 8%, ready to stop out your trades, but you hesitated and rallied back, only down 2%. Did you:

a.) lose 2%

or

b.) gain 6%.

Trading is all about the bottom line. It's all in the figures. Next trade.

 

[Cutten]

Quote from ByLoSellHi:

You have an intraday gain of 8% on your book at 11:00 am.

Rather than cash in, you suspect a bullish fever on the day, and decide to risk riding your profits higher.

The market takes a sharp and nasty sudden reversal, of such a magnitude that it reverses your convictions.

You close out all of your positions at 12:15 pm, rather than risk further market erosion, up 2.2%.

After you close your positions, the market reverses yet again, and closes at a level that would have kept you up roughly 8% for the day had you stayed long.

Have you:

a) Booked a profit of 2.2%?

or

b) Lost 5.8%?

Both. You are up 2.2% relative to what you had at the beginning of the day. But you lost 5.8% off your equity high.

Your position at the top of the market that day, was identical to that of someone who just had come into the office, was totally flat, and then decided to buy on the same size as you. If someone came in flat, bought the high of the day, then lost 5.8%, you'd call that a loss, wouldn't you? So your position, which was identical, is also a loss. Pretty simple really.

Any time you have on a position that has open profits or losses, your position is *identical* to someone who has been totally flat, and now suddenly puts on the same position as you. Your entry & exit rules should be identical regardless of whether you are buying now, or bought 6 months ago and are sitting on a gigantic profit (or loss). Anything else is completely irrational.

 

[Cutten]

Quote from patch227:

Set a daily target.

When you reach the daily target stop trading after the first loss.

If someone offers you a coin flip with a payout of $2 for heads and a $1 loss for tails, would you stop taking that bet just because you "hit your target" and then tails came up once?

 

[Cutten]

Quote from traderdragon2:

If you count that as a loss simply because it was higher at one point, then ive never had a winning day in my life

Your profit on the day is measured from what you have at the start of the day compared to what you have at to the close. It is not measured from your intraday equity high to your equity on the close.

That's the difference between a net losing day, and a day where you had some intraday drawdowns but still finished ahead.

 

[TradingMan]

Or be down -$120 like I was today... keep reading the markets wrong and everytime I went long the market dropped and everytime I went short the market went up... oh well next week will be better...

 

[patch227]

Are you saying that people trade totally without emotion just like flipping a coin?

Quote from Cutten:

If someone offers you a coin flip with a payout of $2 for heads and a $1 loss for tails, would you stop taking that bet just because you "hit your target" and then tails came up once?

 

[IronFist]

Profit. You have more now than you did at the open.

 

[dinoman]

Its called your intuition allows you a 1% stop loss on your scenario described.

 

[El OchoCinco]

People should monitor their own account balances not compete to be the biggest winner at IB or any other brokerage for that matter. Trading merely to measure yourself against others is the absolute wrong focus and will lead to trading mistakes of greed and ego when you happen to be near the top of the list or are trying to get there.

In all honesty, what does it matter how you are doing compared to others at IB since other accounts at IB is completely irrelevant.

Quote from hajimow:


On another subject, For those who have an account with IB, I have suggested to add a chart for account balance so you can see your account value during the day and month,..... to see how it is doing in that period. I have also suggested to monthly rank the IB account holders based on their performance so you can see how you are doing compared to the others. Please take a minute and vote to my suggestions. Search for "hajimow" to find my suggestions.
The link for featured polls is:
http://www.interactivebrokers.com/en/general/poll/poll.php?ib_entity=llc

 

[stock_trad3r]

How often does a daytrader book an 8% profit?