I understand. So lets say you had substantial confidence that thursday's gain was the start of a new trend and breaking resistance, you'd leave it in overnight until you decided there was too much risk in holding it any longer. Otherwise, on treading water days (up 10, down 10 etc), you make a bunch of in and out moves.
You've got it. Like I mentioned before you will miss a lot of opportunities treading water. I find myself thinking "Had I done X I'd be up Y now." It's not healthy to think like that. After awhile you just move on and look forward to the next chance. I had thoughts about buying calls around NDX 1545 on Thursday but I didn't because I felt I'd be gambling if I bought anything before the annoucement. I also don't trust this market. Had I gone through with it I'd be up enough where I'd hold overnight and move my exit levels up.
You have to understand there are several different types of traders on this board. % return traders Probably part time traders who dream about running a hedge fund or mutual fund. These traders base there profitability against the amount of money they deposit in there trading account. system traders These traders also are interested in % return. From what I have observed they are more focused on % drawdown. They are more of a professional group. gun slingers I am one of these traders. This is a trader looking to take advantage of whatever the market provides. He is an active daytrader. The gun slinger usually rely's on his intuition for his trading success. This type of trader is looking to be profitable everyday! If this trader loses money on any given day it is his fault. He either broke a rule(added to losers, didn't get out of a loser, lost focus, etc) or as the title symbolizes he was out drawn and took one between the eyes!!! Taking one between the eyes is not an excuse because this type of trader should adapt to anything the market brings and trade accordingly. If he takes a big loss on one trade his activity throughout the day should absorb this uncharacteristically large loss. However taking one between the eyes should be a rare occurrence that happens only a handful of times throughout a month. This trader is also thinking about percentages. His focus is on daily goals ---- having a larger percentage of winners to losers, larger average winner compared to average loser, and largest loser should be much smaller than largest winner. His ideal goal is to have 100% profitable days each month. This goal is rarely reached because of human error. The gun slinger accepts human error as part of the trading environment. The gun slinger comes to work each day focused on accumulating money each day. He thrives off excessive market volatility. The more intraday volatility the more trades he can make. In theory the more trading opportunities the more profitable he will be. He does not worry about his long term success it will take care of itself. Now I will talk about my personal situation to help you understand that account size - % annual return is not relevant in my situation. I am a futures trader. I only keep 15,000 in my trading account. I trade ER2. My max position size is 20 contracts. At the end of the week I withdraw all of my profits from the trading account. When I focus on the next trading opportunity I have great success. Usually on any given trading day I will average 30-150 trades depending on how long I decide to trade. If I focus on what my annual % return will/could be I lose confidence, concentration, discipline, etc. The long term will take care of itself if I follow my daily routine.