profit target for scalpers/active day traders

Discussion in 'Index Futures' started by enlightedtrader, Sep 2, 2007.

  1. 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.
     
  2. 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.
     
  3. ssss

    ssss

    ...

    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)
     
  4. ssss

    ssss

    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.
     
  5. 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.
     
  6. ssss

    ssss

    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
     
  7.  
  8. 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.
     
  9. mde2004

    mde2004

    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.
     
  10. ssss

    ssss


    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"
     
    #10     Sep 3, 2007