x2 when you are just starting out i also believe that a set loss limit is in order. Then once you understand your edge and can control your emotions i feel it makes no difference if you have one or not. a target for the day makes no sense to me. The market has no idea what your target for the day is, it is not going to move different once you achieve it. targets cause unneeded emotions. " i was only 2 points from my target and i had a loser, now i have to make 3 points to hit it". "If i can only get 1 more winner i can hit my target and stop for the day, oh shit i had a loser, damnit etc etc etc" the market could give a shit what your targets are. trading is 95% emotions----- dont create more of them for no reason
Last week I had made one trade for my daily goal of 2.00 in ES, in which case, I reduce my contract size 90%, I then went on to lose 13 trades in a row. Then I got a winner and luckily the day was over. However, if I had started out with no winning trade in beginning, my system would have continued for me to trade all day long. In the several years of trading these 2 methods and dozen years backtesting, I have never encountered this many losses. Matter of fact, I strive to keep losing percentages on a weekly basis to 15% or less, which means many break-even trades and winners. But even if I had taken all 13 losses, total money lost would have been under 2% of my account. You have to know your system well and know what kinds of drawdown you can experience to decide when you should stop. Before last week, on rare occasion, seven in a row losing trades would be the limit, normally three is the "mean" and often times I double size on third loss. As far as daily goals, I believe in them but at the goal, I reduce contract size, and should the rest of the day goes bad, I will not allow a profitable day turn into a losing day. Did I feel like crap that day? You bet I did, but I only traded system trades, had I done "extra" non system trades, then most likely would have been a huge downfall.
Fwiw Sir, A loss â Yes â absolutely everyone should After all weâre only human, not robots â everyone has an off day / or days A gain â not sure Depends on how mentally/ emotionally developed you are⦠Meaning can you handle being handed $500.00, $1K, $5K, $10K..., or more - instantly..., and never batting an eye, or having your heart rate increase one beat? Only you know the answer to that⦠(After all you earned it â makes no since to give it right back just because youâve got the adrenalin flowing - and you think you're 10' tall and bullitt proof) Btw â Adrenalin will make one do stupid shit no doubt â Iâm living proof. Regards RN