Profit Targets

Discussion in 'Risk Management' started by gsmaster, Feb 14, 2008.

  1. gsmaster


    Hi Everyone,

    Maybe this sound like a Newbie thing but I am starting to find out that Statistically picked profit Targets can yield equal or better results in total points and win % than just let profit runs and get stopped out by some sort of trailing stop...

    I would like to hear your opinions about Profit Targets if you are willing to share :)

    I know it depends a lot on your trading system but for sure you have all experimented with all sorts of exits and would be great to hear what do you think are the best ways to exit you have found...

    Thanks for your contribution and for helping me in my quest..

  2. Exits are one of the most dificult things in trading.

    I think you are saying that it may be better to have a set target, based on historical volatility within your time frame.

    This seems to me a good approach. It will enable you to consistently collect profits when moves turn out to be weak to average in strength.

    The flipside is that you will leave money on the table when larger moves happen. This is fine - you just have to adapt psychologically. Fear of leaving money on the table is to be avoided.

  3. Sometimes they help, sometimes they don't. Just like stops. Each system can have its own behavior. You need to backtest each thoroughly to see for yourself. Don't rely on people's opinions.
  4. i don't have much experience, so beware! intraday and letting profits run - i was never really good at that, and market doesn't seem to allow them to run . But i think targets based on volatility/market conditions are better, using trailing stops is just too much agony worrying about whether a trade will hit the stop - and they do get hit mostly because the market is chaotic intraday. so it depends, i would either have wider stops or just use as breakeven point stop and no trailing.
  5. maxpi


    I'm building a system for scalping an index future. I'm finding that volatility targets/stops are working for the morning session and fixed ones are working mid-day. The latter part of the day may need something entirely different because neither is working that well so far. I don't have a lot of data to test on but preliminarily that is what I'm seeing...