Thank you everyone for the great advice on exits. I’m doing much better on that this week. I think I need to have a daily goal and then call it quits for the day. I seem to just keep trading and can turn great profit into a breakeven day or a loss. Does anyone want the comment on a reasonable goal in points per contract on NQ and ES.
Yes -- forget about profit. It sounds like you're scalping. If you're scalping, you're like an NFL quarterback. Isn't the Superbowl this weekend? If Tom Brady throws a touchdown, what do you think is running through his mind in the next huddle? What if he threw an interception? Do you think he goes back out with that prior pass on his mind?? Not if he's a champion. You have to have no memory of the prior trade -- just work the market in front of you. Concentrate on *process* -- not on results. If you work on process, two things may happen: 1) you will always have room for improvement, and 2) you won't carry the prior trades (good or bad) around with you, leaving room for more of the current market. Those who concentrate on results will push trades -- enter too much, enter too soon, *stay* too long, miss exits -- all because they're trying to get this trade to conform to their prior conception of it. The trade, and the market, don't care about your goals. And will kill you. How much should you seek, per day?? Figure that out at the close of each day -- how many signals/trades did you get, profitable percentage, time-in-trade -- all that rot. And then check out how you did against that metric. (I mean, Jeeez! Quiet days?!? You better have lighter demands on you!) But when you sit back down tomorrow morning -- put all that aside until the closing bell. Them's my thoughts.
Quitting while you're ahead is a habit for gamblers. And not good gamblers either. But what sort of coffee shop closes its doors right after they've sold 3 coffees in a row?
What you are really saying is, should I give up after I’ve made some money, because I don’t have confidence in my trading ability? You should never give up, but you’re doing it wrong. If you don’t have confidence in your ability to come back after losing trades, then what you need to do is build that confidence. You can’t build it trading a risky asset like futures, unless you have money to burn. You need to trade small, very small, until you have proven to yourself you have a system that works. You need to be FEARLESS to win. Once you’ve built that confidence, you won’t want to miss one minute of the market day.
This - exactly. Looking at it superficially, "this is illogical, Captain". If your trading has a genuine, proven edge, you should be applying that edge as often as you can; if it doesn't, you shouldn't be trading a funded account at all. "Stopping when you're x points up for the day" has no underlying logic in itself, John. You might just as well argue a case for "stopping when you're x points up for the hour", or for the half-day, or for the 2-hour or 2-day or 3-day period, or whatever else. (I said "in itself" because clearly there are some methodologies which revolve around trading things like "opening-range breakouts", which are in a different category for these purposes, but we're not really talking about those, here, are we?). I don't think "daily goals" are useful or helpful, for most people, most of the time. Monthly goals, perhaps (though I don't have one, myself), but even then I wouldn't try to quantify them in terms of "points per contract": that's not a good metric.
Your only goal should be: trading your system from opening till close. The more you trade, the higher the probability that the result will be in line with backtesting results.
I agree with most of what you said, but you definitely need to have rules set to manage your capital and your mental capital. Just as an example..if you're up $1K on the day and you find more quality trades then set a rule that you can't let your account fall below $500 profit on the day...You still took more trades to push the day higher but have kept the day profitable and did no damage to your mental capital..come back the next day just as strong.
S.O.H.!!! Having a rule like BlakeJ outlines will allow you to Sit On [Your] Hands, without any mental qualms or anguish or ANYTHING. (Except, perhaps, that profit in your pocket. Or, in the case of "I am not in rhythm with the market" Days, a minimal loss.) Way-
Damaged traders... Can be given a genuine, proven edge and really mess it up. The psychology piece may not be in place. There may be a limited time when it is reasonable to stop trading live the first time you are showing a profit each day (you can then switch to sim). Do this until your psychology starts expecting and being able to deal with success. Dealing with success may not be as easy as it sounds. But I like your logic Xela, for most trading circumstances
Quitting after hitting a daily target is the first sign that you're trading from a place of fear and don't have confidence in what you're doing. That's not a good place to be if you plan on surviving for the long term.