Experinced traders only please ,Profit goals vs. buying power

Discussion in 'Trading' started by EQTRADER, Jul 13, 2002.



    I'm trying to calculate a ratio between how much buying power someone is using at a particular time to his realistic profit goal.
    Please let me know if you agree with the following:

    These figures are for INTRADAY TRADING ONLY

    Lets say a trader is long a basket of 7 stocks
    1k- adbe
    1k- bls
    2k- aol
    2k- ge
    2k- amat
    2k csco

    12,000 shares total using approximately $260,000 in buying power @ 10am.
    if the market rallys what should be his profit goal ?
    I know this is subjective, but assuming these are strong stocks when the orders are entered ,some rally as the should, others may lag .

    I think a worthwhile profit goal would be at least $4,000

    Any thoughts ?
  2. I think an average of $3000 a day is realistic, $4000 is on the high side....
  3. 1% of your buying power is very good. So in this case $2600 would be good.
  4. lousy question; i doubt 1 in 100 day traders would put on that type of trade. Styles differ but a better question might be if you used 260k by end of day what % profit might you make on those funds? I sort of agree with candletrader, I strive for 0.5-1.0 % per day on whatever funds I use THAT DAY. With pattern day traders allowed 4x, it behoovs one not to have too large an account balance, but a consistent(and that is the key word here) 1 % per day wll make for a pleasant Xmas come yearend!
  5. rs7


    Agreed. This is not what I call "trading" This approach (and I have seen it) I refer to as "placing your bet".
    I know of one trader that does something along these lines. He trades the open. Places his orders as mkt. on open. He is done and gone before 10am. He has had hot streaks and cold. Overall, he has made money, but on a percentage basis his return is pretty low. He trades large size, so he doesn't need large % gains. But I have seen him go through very trying times.
    Also, he is very young, has no real expenses, and is intellectually gifted, certainly smarter than me. He has made his decision, and stuck to it. His turnaround was about a year ago when he stopped trying to make back the losing days. He left win or lose. So once again, discipline wins out.
    BTW, if he made 1% a day (he does not) he would be about the wealthiest 24 year old you could imagine.....(non athlete, non heir).
  6. Pabst


    What if your "porfollio" only rallies 2k early (not enough for you to feel like taking a profit) and then the market breaks, what is your downside risk? Asking what one "should" make is IMO a recipe for disaster.
  7. lol...this is pointless...it's like saying you open a store, have 500k worth of shit on the shelves, how much are you going to make by noon if you open at 9:30...?


    I see what your saying, This is what I would do:
    If the market rallys and these stocks don't go up I will sell at the market . If the market breaks I will sell them if they act weak relative to the market, taking a loss no larger than $2,000. If they Hold up in a sell off I may add to my positions.


    Thank you for your posts....
    Let me explain my buying power another way,
    Lets say my total buying power is $1,000,000 , I am only using $250,000 in these positions I'm not sure a percentage is the proper way access win goals.. I used in my example different stocks with different prices, and some of the stocks will be more volatile than others with higher prices. A true day trader think in terms of 1/4 , 1/2, 3/4 1pt profits not percent gain. Example, IBM (when acting strong) will Rally 1pt if the indu. goes up 50pts. I 'm trying to base profit goals on this thinking, using buying power as a guide


    Its not funny, Its called a mark...
    What is a good mark on $260,000 ? When do you sell into a rally? This is what real traders do !
  10. VOLUME


    Take what the market gives you and by the end of the year, you'll be more than happy with your gains.
    #10     Jul 13, 2002