Daily Goals: System or Dollars?

[evolved trader 10]

Hey Guys and Gals,

 

After heeding some advice from Minoo I came to realize my challenge is 100% mental and not edge. I truly believe that if you’re highly analytical it’s not difficult to develop a successful winning edge. To me having an edge is very black and white, although it can take many years to create one, once the basic rules and guildlines are there, it’s very straight forward.

 

However there are so many moving parts to the human mind. Our brains are pretty much the most advanced pharmaceutical store on the planet. It takes a lot of mental work and repetition to develop our minds to a level where they are in sync with your system, or hence the self sabotage.

 

So heres my question to you all, Do you focus on a daily profit target or solely trading in line with your edge or both?

 

By the way, thanks everyone for their input. Every morning I wake up and meditate for an hour before the markets open. During that period I've realized that every morning I’d feel very nervous and overwhelmed about trading. I came to the realization that I had a set monthly target of a dollar figure I was looking to hit. Around $1000- $1500 a day. I’m still trading “1 lot” until I reach a level where I match my systems performance. Basically to perform that I’d have to “squeeze” every ounce of profit out of the day and trade my system to a tee....perfectly. I have done this in the past but not on a consistent basis.

 

So now what I’m thinking is to set a daily target of $250 a day when I think of that I don’t have the feelings of doubts fears and anxiety. I have a goal to average this daily target for the next 30 days, just to gain the feeling of consistently earning money every day in the markets. Then move it up to $300, $400, $500 ect.

 

Does anyone think this is too limiting and I’d be training my brain to take profits too early as my technical targets would have not been reached or is it a good idea to get myself used to consistently earning revenue? Or is it better just to focus on trading my system and let the profits be the by product?

 

Thank all for the input,

Ryan:)

[Minis Trader 10]

For me the first thing to keep in mind when I set my daily, weekly, monthly and annual goals is that you need to have something to shoot for. But most importantlly is the goal needs to be realistic. To have a goal of 1 million dollars a day with a 50k account is pie in the sky (At least it is for me).

 

If you set a goal of $250 per day and you start reaching it on a consistany basis you are then able to move your goal up to $400 per day. Then $1,000 per day and so on.

 

By having a smaller goal set as you get started you will be able to focus only on setups that meet the rules of your system and you will start to build belief in your signals.

 

To me a goal is a starting point but goals should not be stagnant they need to be dynamic.

 

Remember this "A goal not written down is nothing more than an idea", write it down and review it daily.

[evolved trader 10]

Hi Minis Trader,

 

Great points. I do review my goals daily and find that most beneficial to keep everything fresh on my RAS (reticular activation system).

 

By having a smaller goal set as you get started you will be able to focus only on setups that meet the rules of your system and you will start to build belief in your signals.

 

You just have me an awesome idea. I have a struggle with thinking I’m limiting myself and my system by lowering my goals to $250 a day. But, one of the area I am in the process of overcoming is to enter the markets on time off a valid signal from my system. Starting Monday I’ll enter the markets with valid entry reasons and then just immediately follow up (with a stop) and a limit order at a prices target of $250. And if the trade rides through to my actual system target then I can take profits on paper for now. At least this way I can train my brain first to get comfortable entering in on time.

 

My friend you are brilliant.

 

Thanks a ton!

Ryan:)

[suriNotes 11]

Hi evolved trader,

 

See if this article I posted may be helpful in your quest...

Specially see TradePlanner calculator link in the article.

 

http://www.traderslaboratory.com/forums/f62/how-to-select-a-best-chart-4448.html

 

Regards,

Suri

 

 

Hey Guys and Gals,

 

 

By the way, thanks everyone for their input. Every morning I wake up and meditate for an hour before the markets open. During that period I've realized that every morning I’d feel very nervous and overwhelmed about trading. I came to the realization that I had a set monthly target of a dollar figure I was looking to hit. Around $1000- $1500 a day. I’m still trading “1 lot” until I reach a level where I match my systems performance. Basically to perform that I’d have to “squeeze” every ounce of profit out of the day and trade my system to a tee....perfectly. I have done this in the past but not on a consistent basis.

 

So now what I’m thinking is to set a daily target of $250 a day when I think of that I don’t have the feelings of doubts fears and anxiety. I have a goal to average this daily target for the next 30 days, just to gain the feeling of consistently earning money every day in the markets. Then move it up to $300, $400, $500 ect.

 

 

Thank all for the input,

Ryan:)

[fifty2aces 10]

Unless you take a lot of trades every day, it might be better to set your goals over a longer timeframe (e.g. a week or a month). If you only take a couple trades a day, you'll probably have regular days where you miss your target, purely due to small sample size/bad luck. Aiming to be profitable over a larger number of trades will hopefully prevent you getting too attached to short term results which are heavily influenced by variance.

[Minis Trader 10]

Hi Minis Trader,

 

Great points. I do review my goals daily and find that most beneficial to keep everything fresh on my RAS (reticular activation system).

 

By having a smaller goal set as you get started you will be able to focus only on setups that meet the rules of your system and you will start to build belief in your signals.

 

You just have me an awesome idea. I have a struggle with thinking I’m limiting myself and my system by lowering my goals to $250 a day. But, one of the area I am in the process of overcoming is to enter the markets on time off a valid signal from my system. Starting Monday I’ll enter the markets with valid entry reasons and then just immediately follow up (with a stop) and a limit order at a prices target of $250. And if the trade rides through to my actual system target then I can take profits on paper for now. At least this way I can train my brain first to get comfortable entering in on time.

 

My friend you are brilliant.

 

Thanks a ton!

Ryan:)

 

 

 

Glad to hear that it will help, let me know how it goes.

[BlowFish 10]

There is an argument against fixed money daily goals and that is you can only take what the market is offering. Would it not be a better goal to take all the trades presented and manage them properly during the hours you trade? Knowing when to press it and when to ease off can improve results.

 

 

Having said that having a good general understanding of what you might expect (points wise) over the period that you focus on can help alert you if things are OK or going wrong.

[evolved trader 10]

Suri

Great in-depth article. I’ll take a look over and heed some of your suggestions. Thanks for sharing.

 

Fifty2aces

 

Excellent points. I do stick to a 20 sample sizes of trades and don’t re-evaluate things until the week is over. I’ll still use the sample sizes but also use the dollar figure as a target because it is very tangible.

 

BlowFish

 

Great point also. That’s where my conflict exists. Because I define successful trading as properly executing my system and allowing the profits to be the by-product. That’s why I was curious if you guys had daily dollar targets set. Suri’s article gives great points how to evaluate that.

 

Thanks everyone for their advice,

Ryan

[thehunter11 10]

Don't like it. No profit target ever. I nevr think in terms of a profit ever. I just trade my plan. I you have a good trading plan that works just do it every time you get your setup as long as you do that and just trade your plan every time you will be amazed at the end of the week were your account balance is at. For what its worth this is how I do it. On monday morning I start my day/ week with a blank sheet no thinking about the past or the future just focusing my energy on today right now. I have a very good trading plan have been at it for 10 years but this plan took from 2001- 2005 to get. Has been working great since 2005 including the last 2 months no difference its very repetitious over and over and over same setups. Anyway as long as I trade the plan every time I get my set up it works over and over and over. Not every trade is a winner but the winners outnumber the losers big time over the course of the week. I never look at my account balance until Friday afternoon at 4:15 pm. I know that over the whole week I am always ahead I have had very few losing weeks and if I do its small compared to winning weeks. The point of this is that I never limit myself to a gain or a loss as long as i trade 90% of my setups and just let them go. I win . The key is doing all the setups. I do get about 75-90 % every day that is the key. Just doing it . If you have a good trading system it will give you the confidence you need to follow through on it if you don,t follow through on it than your trading system is not what you think it is.

 

Sincerly , The hunter.

10+ years of trading experience

[CandleWhisperer 10]

Don't like it. No profit target ever. I nevr think in terms of a profit ever. I just trade my plan. I you have a good trading plan that works just do it every time you get your setup as long as you do that and just trade your plan every time you will be amazed at the end of the week were your account balance is at. For what its worth this is how I do it. On monday morning I start my day/ week with a blank sheet no thinking about the past or the future just focusing my energy on today right now. I have a very good trading plan have been at it for 10 years but this plan took from 2001- 2005 to get. Has been working great since 2005 including the last 2 months no difference its very repetitious over and over and over same setups. Anyway as long as I trade the plan every time I get my set up it works over and over and over. Not every trade is a winner but the winners outnumber the losers big time over the course of the week. I never look at my account balance until Friday afternoon at 4:15 pm. I know that over the whole week I am always ahead I have had very few losing weeks and if I do its small compared to winning weeks. The point of this is that I never limit myself to a gain or a loss as long as i trade 90% of my setups and just let them go. I win . The key is doing all the setups. I do get about 75-90 % every day that is the key. Just doing it . If you have a good trading system it will give you the confidence you need to follow through on it if you don,t follow through on it than your trading system is not what you think it is.

 

Sincerly , The hunter.

10+ years of trading experience

 

Take care of the process of trading and the outcome of trading will take care of itself.

[brownsfan019 17]

It's interesting to me that the more things change, the more they stay the same... Meaning, great question which has been discussed in lengths on TL before. Some good discussions somewhere around here.

 

I'll just say that it depends on you, your trading system, risk tolerance and ability to focus all day.

YOU

: Can you handle trading all day? Trading all day will have ups/downs and plenty of days where stopping might have been better. Can you accept that?

 

SYSTEM

: Can your system make money trading all day? Some systems do very well in the AM (good movements typically) and some systems can crank out profits all day.

 

RISK TOLERANCE

: Can you handle any intra-day drawdowns you might have? While you may make more money at the end of the day trading all day, there's a chance that you will have some losses getting there.

 

FOCUS

: Even if the system makes money all day, can you do it all day? Make no mistake, trading all day is not easy IMO. Again, while the system may make money had you been trading all day, that assumes you are trading all day and not stopping when tired, wore down or going through a intra-day drawdown.

[darthtrader3.0beta 10]

I tried a daily profit target last year and while it was helpfull I found a daily trade limit to accomplish the same thing. My huge problem last year was that I would always trade far better after a loss than a win or two..the real issue though was that my entry was not defined enough so once I got a few wins I would take lower probability trades than if I had just lost. If that is a problem give yourself 1 real money trade a day, then once you fired that shot you can only paper trade until the next day.

The problem with a profit target is you don't want to put an artificial and arbitrary cap on what would have otherwise been your biggest wins.

[evolved trader 10]

The Hunter

 

Great suggestions and very inspiring to hear a trader involved in the game 10+ years. Congrats. I like your ideas of not looking at your account balance until Friday and only focusing one day at a time. Like I said, its very inspiring to read your post.

 

Brownsfan

 

Great questions to ask, thanks for the advice and insights.

 

DarthTrader

 

The problem with a profit target is you don't want to put an artificial and arbitrary cap on what would have otherwise been your biggest wins.

 

Exactly!

[SwingTradinJay 10]

Trade your signals as much as possible, unless a chart pattern overrides your signal!

 

Profit is secondary...prevent loss and over-trading and everything good follows.

[zdo 20]

Have you read the article The Utilization of Anxiety as the Primary Determinant in Position Sizing Decisions by Zkared Drader ?

Neither have I... but sure would love to... maybe he discusses the option of leaving the top end unlimited but not letting the day's profits fall back below a certain dollar amount...

 

 

 

Think for yourself as though your life depended on it.

[zdo 20]

For most who find themselves in this thread, drop/ban all the money goals. Remember that old (negative ) performance adage “Don’t think about the money” ? So, if not the money what does one think about? Instead of money based goals, set behavior goals that 1) move you toward optimal state and 2) bring you closer to the full development of and application of your edge(s). In that order? imo, giving these 2 areas close to equal attention is more important than an order as both attenuate actions and reaction relevant to market auctions and trading tactics, technique and systems. Basically it’s 1) ‘state right now’ goals instead of self improvement goals and 2) action reaction goals specific to the actual markets and trading approach instead of money goals. For many, an appropriate first goal is to get ALL you focus on the action goals i.e. to get rid of the split attention of ‘one eye’ even glancing at the money. Literally let the money take care of itself – and it will.

Also, for most, pay little concern to organizing, or prioritizing, or a making a hierarchy of these action goals. Just keep the goal hopper full and accessible/visible/present. As you approach the fulfillment of one goal , make sure you have already added a new worthy goal to the hopper.

 

…Not saying setting small money goals and working up form there won’t work… am saying most likely if you do that then look back you’ll realize in the long run any ‘goal’ energies utilized would have been more beneficial had they been situational action and subjective state goals instead of money goals… if you find yourself in this thread, most likely you still experience at least vestiges of fear in trading. Go back and look at Mark Douglas’ listing and content of trading fears with a brutal face the facts about yourself attitude. Note that de-sensitization, of which small daily dollar goals/limits is a form, are one of his prescriptions for dealing with trading fears. Money goals dilute awareness away from the real issues. I’m saying face the fears, deeply experience the fears – but use action goals instead of money goals to work through the issues… and btw, keep going until there’s not a scintilla of these fears left… absent fears (and their accompanying mistakes) even a very small edge can be compunded to yield astounding returns.

[brownsfan019 17]

Just wanted to share my experience lately which has been to trade bonds from 8am - Noon EST and then stop. I don't place specific daily targets, just trade what I see.

 

Personally my crutch currently is taking all the trades and staying focused the entire time, which is why I started this thread.

 

Having been at this game for a few years now, I really believe that it takes a very focused and disciplined person to trade all day, every day; so for me what has helped was limiting the work hours and getting back to focusing more. Focusing on quality trades during the hours where I know strong moves can occur vs. wandering off while trying to focus on charts all day that at times could easily put me to sleep.

 

So while I think the question is a valid one, I think the real question is - when does your system perform the best? And then - would it be advantageous to focus intently during those times or try to trade all day?

[minoo 11]

Todays Daily motivator is on Relax & Focus

Below are the wordings and the link at the end

 

++++++ by Ralph Marston +++++++++

 

One great way to maintain your focus is to let go of it for a

while. To make your efforts more effective, get away from

them for a little bit.

 

Intense focus requires energy and enthusiasm. To replenish

that energy and enthusiasm, make it a habit to take a real

break.

 

Up to a certain point, the more you work the more you'll

accomplish. Eventually though, you'll reach a point of

diminishing returns.

 

Enjoy the challenge of working with intensity. Then spend

some time relaxing, away from all that work.

 

Be productive, be effective, be focused and committed. And

then regularly sit back and truly enjoy the fruits of your

efforts.

 

For optimum performance, keep yourself balanced. Allow your

efforts and your relaxation to positively contribute to each

other.

 

 

Enjoy Mnoo

http://greatday.com/cgi-bin/jsenter.pl?2227g07MRpn8

[zdo 20]

Thanks BF and Minoo. … was reading BF’s post about focused and disciplined and personal timing and Minoo's contribution about what also amounts to personal timing. In my view, we are talking about personal ultradian cycles and that has been a huge key to moving me up through the pareto of traders. This is a significant aspect of the State goal work I was discussing a couple posts back... For me, the trick has become not to choicefully take ‘focus breaks’, but to become aware of and align myself to those natural focus / ultradian rhythms.

 

...BF - My immediate thoughts. It’s a dang paradox and this is so against the grain, but there is no way I could trade all day, day in and day out the way I do if I was focused or disciplined – Especially disciplined! If I have to ‘get disciplined’ more than once a month, then I need to acknowledge I’m way off my game…

 

…and now we’ve pretty much hijacked this freakin thread

[minoo 11]

Hey Ryan below is an attempt to your original question to explain my answer & thanks to Zdo for pointing this original thread topic out

 

Your Question

Do you focus on a daily profit target or solely trading in line with your edge or both?

Simple answer is 'I focus on my Edge Evident trading with thyself included as part of edge'

 

My Explanation!

My system has three important parts: Edge, Setup & Triggers

Edge is based on two factors one is based on technical factor and the other is within, as trader-self;

Trader-Self part is an regular pre-routine of the edge, has pre-market self preparation(This Self-indicator has functions such as of BIAS-Guard, Time-Out, Self-talk, etc)

 

The technical part of edge is Market Internal based RADAR (derived from all the TRIN components)

When the RADAR Conformance (RC) is 'Strong' (Edge is clearly Technically Evident) this happens only around 30% of the time and mostly results in trend trading from the price based charts. Its easier on trader-self with the given filter to avoid counter-trend trades.

The self part is least taxed when the Technical Edge is evident & hence I am in the game mostly for longer time as my focus is least trying / tiring and the process is more of maintaing swing positions rather then taking, seeking & maintaining trades

 

Over 70% of time my Edge is not Strongly Evident

This presents more opportunities to open positions and hence more challenging to trader-self so I trade for less amount of time in one go but have different sessions.

Staying-out, when edge is not technically evident, is an concious position by my Trader-Self in the live market.

So 70% of time I trade with Prepared-Self (Edge) and Setups (based on Events, Stats (previous days and Globex only session), Areas, Price Patterns, Trendlines, Slope of Fib lines (very similar to Steve46 thread for Struggling traders where he uses 200 & 80 MA lines) but these are in smaller sessions

 

These sessions are more challenging, mostly to remain out and only to Trigger when the Setup odds are good from an identified or defined area or their confluence. Its more challenging as opportunities are offered in both direction

 

One's System is as efficient as, the least-performing-component (trader-self) of the overall system

I developed the Self-Indicator to address the least efficient component & this has become the most Vital element of my trading.

 

The time I can most focus at length is from 20 to 120 minutes, When the edge is evident (Stong RC) which is mostly during trending markets I can trade for longer with my simple mental market routine of direction continuation preference and counter-trend filter.

When I am trading with Self and Setups (ie in absence of my technical Edge) my self part is working mindfully and so its usefulness is limited in active time.

 

Other trading beliefs & practised processes to help develop Trader-Self part of the Edge are:

There are no hard rules within my system, only self liking guidelines which thyself can more often than not profitably practise

My mind does not know of any defined or indentified set-rules or set-boundaries, which it would like to break or is given habitual place to wonder off too. (This works fine with me)

Whatever unprofitable activities it leads to is for learning purpose and tax free. (minimal to negligible self bashing, mind-drama, etc )

The takings are simply locked in and the upper or lower side of the game is kept open, this to me has become more of an automated process in trade management now. I like it due to the non-judgemental part of it.

'Direction Continuation' definition is when minor highs are broken repeatedly for up-trends and minor bottoms are broken repeatedly for down-trends, each minor breaks in prevalent direction are taken as potential 'scale in points' or entry-points.

Other major non-judgemental part I use in my triggering mechanism is bracketing the trades at areas where price shows characteristics of Change, Chop, Continuation or Area based opprotunities. This process also reduces reliance on indicators and let the market take direction and to be with it.

Also when preferred uni-direction becomes BIAS is where my self-indicator times me out (cant take new trades but can maintain trades)

I do not use OCO each bracket orders with its own stop loss, Self maintained to remain focused in managment of trades and probabilities.

 

The above may sound all good to me now, but if this was not developed by one's own trials and trubulations, than it would had been much challenging to put in practise. (self defeating)

 

When mind matters it best to know and study one's characteristics first in an given environment, than be brutally be honest & true, as most times here the learner and the teacher are the same person. Simplicity based on the truth always Prevails, whether its matter of ones own self or off others.

 

One can only make money consistently by their own system, where self is the most important but also the least efficient part of it.

 

Sorry this turn out to be more long winded than I thought but Hope this helps.

 

-Enjoy Minoo

http://greatday.com/v.html?2228s07MRpn8

Edited March 7, 2009 by minoo

[Uli Schmuli 10]

Minoo, I believe I can say what you have said in one sentence:

 

"Plan your trade, then execute your plan."

[brownsfan019 17]

...BF - My immediate thoughts. It’s a dang paradox and this is so against the grain, but there is no way I could trade all day, day in and day out the way I do if I was focused or disciplined – Especially disciplined! If I have to ‘get disciplined’ more than once a month, then I need to acknowledge I’m way off my game…

 

 

You and I are on the same page then. To trade all day, every day is incredibly taxing on your brain and it doesn't work for me. Now I carve out 4 hours in the AM to get my job done and then move on to other things. While I love trading and love the markets, it still is a 'job' or a means to an end. I'm not looking to trade 8am-415pm every day and make $50k in that time. While it's possible in the futures world, I've seen first hand what focus and determination is needed and quite frankly... I don't have it.

 

That was probably the biggest break through for me in my trading - realizing that I don't want to / can't trade all day, every day and make a good living at it w/o going crazy. Yes, there's a lot buried in that one sentence but those that have been around the block will get it.

 

Personally my holy grail in my trading so far has been realizing that I can't trade all day. That's my grail. Literally. That one change altered my life in so many ways that I couldn't get them all on paper right now. Maybe that'll be for another thread when time permits.

[traderpsyches 10]

A couple of points to ponder

 

#1) Daily money goals make no sense whatsoever from the market's perspective - ultimately the most profitable trading is taking most of what the market is giving when it is giving and to stay away when it is not

 

#2) Having said that, having daily goals can be a very useful tool in building what you all are talking about which is what we call Psychological Capital.

 

Without psych cap, your plan doesn't matter. When psych cap is lacking, you will make mistakes, take too much risk and deviate from the plan. The trick within all of this really is to manage to your psychological state first and foremost. IF you do that, everything else will take care of itself.

 

For example, it is proven that when we are tired we take more risks. So... if you are tired, you will justify taking riskier trades. Managing to psych cap means asking if you are tired first - as a risk management tool.

 

Another issue here is the brain has a "circuit" for ambiguity - in other words, it appears (see Hsu et al 2005) that the brain detects when it is dealing with imprecise or incomplete information. The markets are always incomplete and imprecise. Therefore, our trading plans are at best like the plan a football quarterback has going into the game - when the defensive end comes at him to sack him, he has to abandon the plan and make a decision in the midst of ambiguous info (can he get here, will that guy block him etc)

 

Now... this brings us back to psych cap. The brain reverts to unconscious pattern recognition in ambiguous situations and communicates with the conscious mind via feelings ... so again if you manage to psych cap (most of which is experienced through your feelings), you will be working in concert with how the brain perceives markets.

 

So - my advice is #1) have a daily goal if it helps you manage your mental state but realize that you want to move beyond that to reach the pinnacle of trading. #2) Realize that your real probabilities are your system combined with your ability to execute it and your ability to execute is almost 100% psych cap. (exceptions include technology, margin calls). If you manage to how you feel (yep I can hear you guys screaming now) ... you will both be in concert with the real way your brain interprets markets and you will be using the best risk management tool you have... both of which will improve your performance.

 

...

 

btw - browns fan ... I am originally from Akron.... had season ticks for years.

[brownsfan019 17]

Psychological capital, I like it! Great post!!

 

PS

Another Browns fan here, wow, small world!

[wjrusnak 10]

A money target has seemed to kill me in trading. If I wasn't making my goal for the day, I would end up taking trades that I generally would not take and my stop outs end up getting ridiculous. In essence, I get too much pressure from a daily goal and get destroyed when I'm "on tilt" trying to make up for lost trades. Maybe this works for some, but I would agree with previous posts that a better idea is maybe a monthly or weekly goal. Daily is too short term.

 

O and......GO STEELERS (to all you Browns fans)