Day trading the ES - are daily targets beneficial?

[adrianjm]

Are there any stats or general information about the benefits of closing out the trading day after a certain level of profit? Has this shown to be useful in increasing profitability? Can that level be defined from current trading performance?

For example, if my average profit per day is 1k, should I call it a day if my profit is 1300? I guess std Deviation of profits is also a factor.

Or should you just keep trading, and any idea like this is just fear of losing profits?

 

[adrianjm]

Bump!

OK, I'll make it easy for you. How many of you decide to close up shop for the day after a great first (or second) trade?

 

[DionysusToast]

Bump!

OK, I'll make it easy for you. How many of you decide to close up shop for the day after a great first (or second) trade?

I tend to knock it on the head after a few good trades. I only trade the AM session though.

I don't tend to have monetary targets because sometimes you get in close to the open before you have a good idea what the volatility is. If it's a bit slow, then I'm happy to take a few small ones and call it a day because I know lots of people are getting chopped around.

My best days are when my first trade is a loser though.

 

[adrianjm]

I tend to knock it on the head after a few good trades. I only trade the AM session though.

I don't tend to have monetary targets because sometimes you get in close to the open before you have a good idea what the volatility is. If it's a bit slow, then I'm happy to take a few small ones and call it a day because I know lots of people are getting chopped around.

My best days are when my first trade is a loser though.

Thanks DT. You are omnipresent!

I get the idea about best days.

 

[OrderFlowDashPro]

Profit targets are very useful for the discretionary trader. There are psychological reasons that this is the case. It has been shown that decision making and impulse control decrease with fatigue. So, the longer a day trader trades the more likely they are to make mistakes.

However, it is very difficult to improve trend strategies with any sort of profit targets.

So, if you are placing many trades then a daily profit target should help but on days that you place a trade to hold (trend trade) then one might not want to set a profit target.

Are there any stats or general information about the benefits of closing out the trading day after a certain level of profit? Has this shown to be useful in increasing profitability? Can that level be defined from current trading performance?

For example, if my average profit per day is 1k, should I call it a day if my profit is 1300? I guess std Deviation of profits is also a factor.

Or should you just keep trading, and any idea like this is just fear of losing profits?

 

[adrianjm]

Profit targets are very useful for the discretionary trader. There are psychological reasons that this is the case. It has been shown that decision making and impulse control decrease with fatigue. So, the longer a day trader trades the more likely they are to make mistakes.

However, it is very difficult to improve trend strategies with any sort of profit targets.

So, if you are placing many trades then a daily profit target should help but on days that you place a trade to hold (trend trade) then one might not want to set a profit target.

Thank you for the info. I agree totally.

Running the numbers, if you place trades based on any kind of structure, then I guess your better off taking as many of them as you can - all of them - to maximise your overall profit. But that is only half the game, unless your a machine.

So getting out ahead, or removing yourself as a result of tiredness both provide the positive feedback to build psych capital. I just wish I was a machine....

 

[tassi13827]

tassiinvest

Are there any stats or general information about the benefits of closing out the trading day after a certain level of profit? Has this shown to be useful in increasing profitability? Can that level be defined from current trading performance?

For example, if my average profit per day is 1k, should I call it a day if my profit is 1300? I guess std Deviation of profits is also a factor.

Or should you just keep trading, and any idea like this is just fear of losing profits?

I believe in trading the ES after 10:00 and closing out around noon unless there is a good trade on the horizon at that time.I don't pay attention to how much I have made, just close out. Trading between 9:30 and 10:00 is too wild. It is too boring to sit around after noon to wait for a good trade, that's when you make mistakes. Once in a while you can pick up a good trade between 6:00 and 8:30.

 

[random12345]

It's entirely psychological basically. If you have a system with an edge, then all modelling will show that to close at a certain daily profit level or stop at a hard daily stop are not beneficial (except for Black Swan protection) and contravene the notion of the alpha you are trading.

Trading times is a different thing entirely and of course that would effect system edge. For example forcing any system to trade the Asian session of the E/U isn't likely to add anything.

I would agree that for a discretionary scalper etc then it's a necessary element for the psyche and to avoid Martingaling a bad day into your worst ever day. Prostitution ain't no fun.

 

[DionysusToast]

It's entirely psychological basically. If you have a system with an edge, then all modelling will show that to close at a certain daily profit level or stop at a hard daily stop are not beneficial (except for Black Swan protection) and contravene the notion of the alpha you are trading.

Trading times is a different thing entirely and of course that would effect system edge. For example forcing any system to trade the Asian session of the E/U isn't likely to add anything.

I would agree that for a discretionary scalper etc then it's a necessary element for the psyche and to avoid Martingaling a bad day into your worst ever day. Prostitution ain't no fun.

If you have discretionary elements to your trading, then you can have good days, bad days and days where you know full well you got lucky.

None of that is anything to do with psychology or psyche. Many days just aren't conducive for trading.

 

[tassi13827]

If you have discretionary elements to your trading, then you can have good days, bad days and days where you know full well you got lucky.

None of that is anything to do with psychology or psyche. Many days just aren't conducive for trading.

Would be interested in knowing what others use for a "system" with success trading the ES. I have been following Todd Mitchell with moderate results. I admit to being a freshman at ES.

 

[DionysusToast]

Would be interested in knowing what others use for a "system" with success trading the ES. I have been following Todd Mitchell with moderate results. I admit to being a freshman at ES.

If you are looking for someone with a purely mechanical system for day trading index futures directionally (not spreads), making profits consistently over a period of time, I think the amount of people doing this successfully on this forum is zero.

Worldwide though? I'd guess the number is perhaps a hundred times that amount.

 

[random12345]

If you have discretionary elements to your trading, then you can have good days, bad days and days where you know full well you got lucky.

None of that is anything to do with psychology or psyche. Many days just aren't conducive for trading.

I think I probably agree, but he was talking about hard daily targets and little more complex than that. If he generally introduces a hard exit at a certain level of profit then he is exiting lucrative markets early, while staying in bad ones for the whole day, simply put.

 

[DionysusToast]

I think I probably agree, but he was talking about hard daily targets and little more complex than that. If he generally introduces a hard exit at a certain level of profit then he is exiting lucrative markets early, while staying in bad ones for the whole day, simply put.

Good point.

I certainly would not close a trade because I'd hit my daily target.

That would an odd thing to do indeed.

I'd potentially quit for the day after any particular trade - be it because I've had enough, had a good run or had a bad run. But in the middle of a trade? Never.

On my screens, there is nowhere you can see the P&L for the trade or for the day. I can open it up for a look but it's not visible to me when I'm looking for a trade or in one.

I think there is another element to consider for a day trader too - especially index futures, ags, bonds, metals - well any futures 'cept currencies. If you trade a market that has a 'real' open where the majority of traders commence trading at a set tine - those markets are much easier to trade in the first hour or two. So a set time might make more sense than a set $ target.

 

[random12345]

I think there is another element to consider for a day trader too - especially index futures, ags, bonds, metals - well any futures 'cept currencies. If you trade a market that has a 'real' open where the majority of traders commence trading at a set tine - those markets are much easier to trade in the first hour or two. So a set time might make more sense than a set $ target.

Exactly - often a lot of agreement across Bloomberg terminals after the morning meeting, which can create a nice breakout or some seriously tradeable parabola. BGC won't let anyone off the desks for a **** during the London and NY open because they are being asked to make 10* the prices and this is reflected in the money on the table in nearly all markets.

 

[random12345]

Exactly - often a lot of agreement across Bloomberg terminals after the morning meeting, which can create a nice breakout or some seriously tradeable parabola. BGC won't let anyone off the desks for a **** during the London and NY open because they are being asked to make 10* the prices and this is reflected in the money on the table in nearly all markets.

P1ss is a swear word...?