Spread Betting - Weekly Profit Target

This is a discussion on Spread Betting - Weekly Profit Target within the Trading Systems forums, part of the Methods category; Do any Spread-bettors set a weekly profit target ? - For example 10pts @ £5/pt = £50/week profit 10pts @ ...

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Old Oct 20, 2003, 5:30pm   #1
Joined Sep 2002
Spread Betting - Weekly Profit Target

Do any Spread-bettors set a weekly profit target ? -
For example 10pts @ £5/pt = £50/week profit
10pts @ £10/pt = £100/week profit, or whatever.
Having reached their target either stop for the week, or maybe continue at reduced stakes.
Having read many threads on different financial boards I am certain that many of us overtrade and possibly go from profit to loss, because it isn't easy to maintain a high % of winning set-ups.
If you were to consider setting a profit target for a week and trading that way - what would you choose to do :-

- Day trade indices or position trade individual stocks, UK / US or whatever. I would be interested in any views.

regards Magnet
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Old Oct 20, 2003, 5:50pm   #2
 
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Dont have a weekly profit target - thought about it a while , more of a part-time swing trader. Agree that overtrading is why most spreadbetter lose - why do u think Cantor now have real-time SB XDA software!
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Old Oct 20, 2003, 5:54pm   #3
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Magnet, I think targeting is a 'must' .. but then for those that don't or don't want to because they feel it would muck up their trading psychology, then that is also fine.

But here is my caveat though. No point targeting until you have got or developed a regular daily valid system where you have identified the parameters/pre-determinates that give you very high probability outcomes. Then you can target you trading profits and target the growth of your out-turn (the capital you put in + net cumulative trading profits).
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Old Oct 20, 2003, 5:58pm   #4
 
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Trading isn't really that straightforward. Weekly profits/loses could vary enormously depending on how market conditions are in relation to your particular system. However over the course of a large number of weeks your edge (which you must have to win long term) will play out and you should then be averaging your target in accordance with you backtest results.

For that reason I wouldn't recommend stopping when you reach a profit target for a particular week as you may be cutting short a particularly good trading week where you can't do a thing wrong. Similar to the age old advise to always let winners run, in this case a winning week.

Better advice might be to stop trading in a week when you have lost a set amount as this may indicate that your system is not in tune with market conditions, similar to cutting losers short. Personally I can't do that as I fear that the law of the s@d will always dictate that the first trade I leave will be 'the big one'!
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Old Oct 20, 2003, 6:01pm   #5
 
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magnet,

No point in setting daily, weekly or possibly even monthly targets. You get what the market gives you. Doesn't make any difference whether it's spread betting or any other form of trading vehicle.

Work out how much you are prepared to lose and how much you win will be a function of that (along with a few other things).

Now, if you could just slap me round the head with a wet fish and remind of that next time I push it and over-trade..... I would be very grateful.

Last edited by sandpiper; Oct 20, 2003 at 6:12pm.
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Old Oct 20, 2003, 6:31pm   #6
 
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sid,

True. Thinking about what you've said there, I suppose it depends on whether your trading is mainly systematic or discretionary.

Clearly, if your trading is systemmatic, then you just have to let it play out, no matter what your p&l looks like each day. Little point in a system otherwise.

On the other hand, if your trading is discretionary then it pays to add to your normal line if you get high probability set-ups and you are feeling on top of everything. Conversely it sometimes pays to reduce your line if you are having a rough time.

Sometimes I just can't get a "feel" for what's happening or something doesn't look right or isn't set up right. Doesn't matter whether I am up or down, I'll ease off on the size a bit.

Today being a prime example. A few longs certainly possible on the ES but haven't liked like the look of MER all day. So I've either not bothered or just tipped the toe in the water in a small way.
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Old Oct 20, 2003, 6:54pm   #7
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I trade on the basis:
make as much as you can when it goes well
If the market looks difficult or I'm not making money, don't trade


In other words run your profits, stop your losses.

So some days even to make +5 on Dax is good: other days I struggle to make less than +60!

"Gather ye rosebuds whilst ye may" is a very apposite quotation..
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Old Oct 20, 2003, 7:25pm   #8
 
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I think that the most successful traders use a combination of systematic trading and discretionary trading. Personally I trade a mechanical system but I know, from backtesting, when it is likely to work more successfully and when it is more likely to fail and I adjust the stake size accordingly. I also have mechanical rules to decide this. But there are certain situations where discretion is required, for example a freak spike in trading which abnormally increases the ATR which is a factor in my system.

I don't think that pure discretionary trading works, where you jump in on a hunch or a feeling. Most successful 'discretionary' traders are actually looking for the high probability setups that they know work. In this way they are actually much more systematic about their approach than they may let on!

My reluctance to miss any signals is purely psychological and short termist. I know that if I miss a trade it won't make too much difference long term but I still don't like doing it! In 2 years the biggest win for one trade has been 53.5 ES points (ah July 2002, remember those days?), but that is only 2% of the total points made in the whole period. Missing it wouldn't make a huge difference to the overall result but psychologically it would destroy me to miss that big a trade!
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Old Oct 20, 2003, 7:34pm   #9
 
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Target losses. Chuck it in when you've had enough.
If you're doing well, having a good run, then push your luck.
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Old Oct 20, 2003, 7:37pm   #10
 
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You don't have profit targets.

You work out how much you could lose on each position.
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Old Oct 20, 2003, 11:22pm   #11
mma
Joined Aug 2003
* You don't have profit targets.

You work out how much you could lose on each position. *

correct , a company who I prop traded for , used to have profit targets - believe it or not . needless to say we didn't last long.
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