I have always wondered what other traders think about this. Currently I stop trading if down $200-300 in a day and usually aim for $1000-2000 profit.
No, don't stop. If the iron is hot keep striking. When you are trading well and generating consistent profits you should increase your activity and/or size. When you are not trading well, or if conditions are not right cut back on activity and size. When the wind is blowing raise your sails!
I agree. The only dilemma I run into is being up $2000, then making a few bad trades, and therefore giving back $1500 before I stop. Would using a trailing stop on your daily profit be a good idea?
Try to focus more on trading "well" and consistently taking your trade signals. Fixed upside goals tend to be set too low or much too high. Consider reducing the amount of time you trade each day if it seems you are more profitable during certain hours.
I hear you. What you should do is study your strengths during the times of the day. Do you make 90% of your profit in the morning? I suspect you are close to that and if you tend to lose it in the afternoon then quitting may be best. The first hour is typically my best time of day since I'm a volatility trader, not a trend trader.
If you do choose to limit your upside then you should also limit your downside by probably half of your upside limits. This is assuming you can normally hit your profit target.
YOu lose that $1500, because you get into riskier trades because you know are already up for the day. Concentrate on always getting into ONLY high percentage plays. Don't base what trade you get into on whether you are up for the day or not. There is no need to have a goal if you follow this. But it ain't easy.
Stop if you're beginning to lose patience, focus, discipline, or if you catch yourself going into "chase mode" or if you become indifferent, as well as if you are slow that day and find yourself missing your outs. Also stop if you lose more than a certain amount on the day that is less than you can make back in the good days. By stopping at a max loss you sacrifice some of the days where you might make all the money back and become positive but you also keep yourself from digging a hole which the next day you want to make back so you "chase" your losses. I don't see a reason to stop when up. If you reach a certain number and can't get past it, it's a psychological barrier that you should focus on overcoming.
Do you have a risk per trade .... if i'm up 2000 the next one or two trades will be carefully limited with stop loss orders in place. Quite inconceivable to lose back 1500 unless there's no stop loss in place. Or trading wild without noticing P&L.
It definitely is a pyschological thing and I do sometimes go into chase mode when I'm up big early and I start to think everything is going to work. It always comes back to following my trading plan. Discipline...