https://www.elitetrader.com/et/thre...ifically-predefine-your-profit-target.161290/ Was very interested so see if the numbers would be any different now a days.
I set a profit target and a loss target and a time target on every trade. This, I have three exit strategies on every trade I put on.
I don't set a target price on long-term trend-following trades, the idea is they should run. In fact I try to pyramid every one which becomes a winner. But if (occasionally only) tempted to take a shorter term entry, yes I would set a target, I'm thinking of r:r 1:1. But the real money's in the trend-following.
As a day trader I always have a 1:1 for 1st PT and will take half off as it reaches 1:1 and starts to show weakness. Of course if its telling me I need to take off or exit all before it reaches it I will exit the trade prior to reaching the target.
No targets. Tried targets years ago, they just cost me money. I have to stay loose and move with the groove, shoot from the hip.
Scalping has targets, day trading out by the close, swing or long term has so much at large target and rest has target so far away, might take years to reach. If system gets signal for a short term extreme move, positions will get hedged to take advantage of weakness and eventually hedge reverse for so long and exit.
Hello TonePot, This a good question. For me, trade management (knowing when to exit at trade) is the most challenging task once trade is enter. For example today, took a CL position and exit for 10 ticks as I believe price was about to turn in opposite direction, but I made slight mistake and didn't realize a support level near my exit and CL proceeded to nearly 90 more ticks. That hurts. For me, I am learning that I can assume a profit target, but I should not respect that profit target until price touches the profit target and I monitor price behavior around this area. Ideally, I want to hold a position as long as I can until I have some evidence or belief price is about to go in opposite direction. I want to be a more thoughtful trader and not just exit some profit target, but let price get to that profit target and management it. Ideally, when I exit a trade, my expectations is for price to go the other way, then I know I made a good trade. I use to think in terms of every trade I need R:R greater then 1. But lately, I want to have a better reason for exiting a trade. I want the chart to tell me "you are long and price may be turning, get out of the position". If I exit a trade a profit target, and price continues pass this price target, I will not be to be happy. I want extract as much profit as I can and that is my goal.
My target is defined by rules. If the rules tell me to act, I act, no matter where the price is. Works very good.
Same here. Which set of rules is determined by which entry set-up the trade is. But I always have at least one target, even though it isn't always for the full position-size. I want to get the entire trade to break-even (actually to break-even + 1 tick), though, because avoiding drawdowns is more important to me than making profits.