Profit target is an important and difficult issue for traders. I know this topic has been discussed a lot at ET. The reason I bring this topic again is that I want to limit the discussion specifically for scalpers/active day traders. This is no strict definition for scalpers/active day traders. I'm considering at least 10-20 round trip/day as a minimum in most days (with the exception of strong trending days). I know quite a few scalpers use fixed profit target. Personally I'm using flexible profit target. Here is my general guideline for profit target: 1) I define my trade set-up as 4 categories: continuation, range-bound counter trend and breakout. 2) Generally breakout and continuation set-up have higher profit target than range-bound and counter trend set-up. However I rarely trade breakout. I trade continuation very often. 3) The continuation trade set-up at the beginning and middle of the trend has higher profit target. The continuation trade set-up at the end of the trend has lower profit target. 4) The trade set-up at lower time frame is supported at higher time frame has higher profit target. The trade set-up at lower time frame is not supported at higher time frame has lower profit target. 5) Many times we can use pivot points, previous swing high/low, Bollinger band bound as profit target points. Remember these are general guidelines. I know there are more questions raised, e.g., how to determine the stage of a trend, how to define continuation and counter trade set-up. For discretionary traders, we have to use our experience and the specific market conditions to make the decisions. Every trader has his/her own way to measure the price action and make the judgment. Any additional thoughts on this topic are welcomed. Enlightedtrader.
I enter all of my trades with a pre-set 1:1 R to R ratio with the profit target and stop bracket entered right at entry as the order gets filled. If I have immediate confirmation of the move after entry, with my very defined rules, I will initiate a trailing stop that rides the move until finally stopped out at a profit with any significant counter move of price. The system that I learned is profitable with all trades left at just a 1:1 risk to reward, but I can enhance performance even more by catching some of the bigger moves.
... Not observed any relevant scalping result By scalping atleast 5 $ spread +4.5 $ r/T for retail for e-mini how many operation and with which kind of risk reward do you believe to win from row in 1000 ? 1. Spread and fees very influence result by long row 2. Trader which make in long row from 1000 operation 600 winning by risk/reward 1:1 is very good (one from 1000 ?) If spread and fees is 10 $ per contract of e-mini ,to minimize influence must go as example with profit/loss 250$ per one e-mini ( 240 $ winn ,260 loss with spread and fees) But perform 20 operations in each of trading day would unpossible Or you believe to scalp for 50 $ risk/reward (40 $ winn/60$ loss per contract from game theory point of view ) How great would winning ratio ? Why ? Through price/volume analysis ? Not observed any relevant information . Your respectfully (P.S. -personal record 10 points of ert in 2 hours by public contest by marketzar.com)
thesecrettrader Registered: Jun 2007 Posts: 17 09-02-07 07:55 PM I enter all of my trades with a pre-set 1:1 R to R ratio with the profit target and stop bracket entered right at entry as the order gets filled. If I have immediate confirmation of the move after entry, with my very defined rules, I will initiate a trailing stop that rides the move until finally stopped out at a profit with any significant counter move of price. It is not scientific from point of view game theory . Trade is initiated with some risk/reward Attemt to advance trailing stop through specific set of rule's changed risk/reward relaltion and winning This set of trailing stop rule's can be usefull ,but winning ration and risk/reward relation must be recalculated Monkey make 500 winning operation from 1000 by risk/reward 1:1 Operator ,which make 600 would to be millionar in short time from startcapital 2000 $ Alsov with any proprietary set of trailing stop rule's ,is low chance that any operator would perform 600 winning operation from 1000 by risk/reward 1:1 or 360 winning from 1000 with risk/reward 1:3 Possibly only one from 1000-10000 can make that ############################ Your comment ... The system that I learned is profitable with all trades left at just a 1:1 risk to reward, but I can enhance performance even more by catching some of the bigger moves.
A very interesting topic. There are two kinds of profit targets though: Per trade, and per day. I'd be very interested to see this thread blossoming, but I am unable to contribute as I'm not a scalper.
There are two kinds of profit targets though: Per trade, and per day From scientific point of view 1.profit/loss ,risk/reward per operation operation can be performed in 30 sec or in one year 2.winning/loss ratio 3. trade intensity 4. commission fees ,spread For significance in perfomance evaluation long row atleast 1000 operations Clear first 10 operations can be ocassionaly all win and if operaotr ready to risk 100 % ,to end he would have 1000 time more . You can go in casino and see ,that time from time 10 win in row possible . But who is ready to risk 100% in one operation ? Only 1 person from 100 in best case
ssss, win to loss ratio has a lot to do with how I set my targets and stops..important part of setting a R to R ratio for each trade during initial backtesting. what I trade has a good R to R ratio and that is very important to me.
I do not set a specific profit target goal to reach every day. I tend to look at my p/l at the end of each day so it does not distract me from my trading.
1. That all are related one to another's 2.Experience of one person can only occasionaly relevant to another (different personlity,risk profil &) 3. As stated to date not observed scalping relevant result ,only in undeveloped market as in Russia -one operator won 3 month contest with 10000+ operations , with result some 1148% on 1500 $ in 3 month. But result is deceptive ,as transaction was credited from broker unlimited for 500 $ per month and payed after contest ended . If credit was included by calculation ,that would only 100% per month . If fees payed as in USA in moment of operation ,than possible lower as "0"