Kreslik.com - traders community since 2006

As I sit here pondering the meaning of life, and how to beat the market in the process, I was wondering if some of you would share your daily quotas.

Of course I understand we all want "as much as the market will let us have," but I am more curious to see how much you guys are really going after based on your different methods of trading, both discretionary and automated.

Personally I play for 43 points a day on the dow-mini and for 47 pips in forex. I never trade both in the same day and I can usually hit my goals in 6-8 trades (if I hit it, the numbers are pre comm.)

You might question the odd numbers. I have learned over time that whole and round numbers do not work for me in trading... just remember, they know where the most stops are at.

I never did understand daily goals. Doesn't the market let you know what they should be. I don't trade Forex yet so don't have an opinion. Only Emini. Lets say I trade a breakout system and on one day, it breaks out and rides the trend straight up. I can't afford to take a profit early since this one trade pays for the many sideways trades days that kill a break out system.

Now if I was trading a contrary system, trying to pick the tops and bottoms and looking for mini OB and OS conditions, then a daily limit would be OK. It seems to me that if you could average $100 per day and use very conservative money managment on the account, in a couple of years you would have an account > $2M. I guess that is enough pay for me.

JPT,

Good points. I agree that arbitrary dollar goals are only acceptable for counter trend systems. What I use for Forex is what I call my 2 trade rule.
Basically, I shoot to make at least 20 pips per day with no greater loss than 10 pips per trade (tight stops). If my first trade makes 20 or > pips then I'm done for the day. This prevents overtrading and getting slammed by sideways markets.

If my first trade is -10 pips (typical S/L) then I get one more chance to make 20 pips or >. If this trade bombs I'm out for the day for a total of -20 pips. This makes recovery easier.

Here's an example of my trading. Today I made 39 pips on my first trade. Hence that's all the trading I get for the day. Yesterday I made 16 pips on my first trade (got out because it was getting ugly), and then got 1 more trade for 20 pips. I didn't trade on the 4th, but on the 3rd I lost my first trade -10 and the second trade was 8. That's all the trading I got for the day.

This method isn't entirely mine BTW, its discussed by a cat named 4Re at the Elitetrader forum. He uses it primarily on the E-minis with slightly different point requirements and he uses S/R in a different manner than myself.

Edward

Hate to show my ignorance, but what is a pip worth, lets say on the EURUSD?

What is 20 Pips? Is that $20, $200, $2000? Just don't know. I think it is $200 but not sure.

JPT,

Standard contract 1 EURUSD is $10 per pip so 20 pips is $200 per contract. Obviously one can trade multiple contracts much like an ES trader.

Edward

JPT,

I think it's really dependant on your trading style and strategy as to how much in profits you can take, and whether you need a daily goal. I see how with a breakout system you may need to let the market do what it does before you take profits. I do however know traders who trade breakouts and patterns where they always cash out at a certain point.

I think the most pertinent reason relates to a casino type mentality, if you win and keep playing you have high odds of giving it all back. I also have personally experienced traders fatigue. Lets face it trading is mental work and can be exhausting. Towards the end of the trading day, one is more likely to make simple mistakes, just as a carpenter would (no pun intended) if he had been carving for 7 hrs straight.

Euda,

Interesting approach you have there in limiting your total number of trades. Except for a single trade strategy, I have not heard of this before as opposed to profit or loss limits. I assume this is tailored to fit your own needs of money management and I will read up on it. Speaking unseasoned to this idea though, do you ever encounter a losing streak which is hard to recover from? It appears at first glance that eventually that situation will occur, but once again I have no experience with your method.

jhtumblin,

Well what I'm using has about a 85% win ratio and a 2:1 risk to reward ratio. I've been using the method for the past 3 months and have been profitable in 90% of all weeks. There are of course losing streaks but I have tested the system over the past 3 years and I haven't run into anything debilitating.

Of course the method of limiting your trades would not be appropriate for some types of trading and would be unnecessary for automated mechanical trading. The main purpose of limiting my trades is psychological. It keeps your head in the right place and avoids over trading. Also because I know I don't get to trade every setup it really forces me to only take the setups I'm very sure of.

Edward

Edward:

Very interesting approach. After reading this, I went back thru my notes the last few months and I have found that my first two trades are generally good, but the third stinks. Then I spend the rest of the day scrambling to get out of the bad one and recover. You may have a point about psychology.

thanks for your insite.

Regards