I'm thinking about implementing a weekly profit target. To stop greed getting in the way of making a consistent profit.
Last week for example I was up 700 usd and instead of calling it quits I traded one more day and gave back 400 usd of profit. In this example if I would have implemented a profit target of 500 usd for the week. I would of finished up the week; quicker, happier and richer.
What are your thoughts on the pros and cons of a weekly profit target?
This is one case scenario, It could have happened all the way around. Since I don't know your profitability and expectancy I cannot judge. As far as I am concerned my limits are based on the number of daily trades, 2/3 no matter what are the profits or losses. I can increase to +1 if the day is good or decrease to -1 if I have a bad start or bad feeling. My trading is discretionary and based on Price Action, therefore If the market allows me, I let it run if am in a good mood and I stop trading if not, regardless of PNL.
In my experience It is better to have weekly and daily goals. My daily goal is $200 a day with up to 4 trades daily loss limit of $100. My weekly goal is $800 with four days of trading with a weekly loss of $400. If I hit my $200 in one trade im one and done. Same thing if I lose $100 in one trade this makes me think and examine my every trade carefuly. And if for some reason I hit $800 in two days and then im done for the week. Having a plan and trading it is all part of good discipline.
My strategy is strictly to protect against loss. I have a 63% win rate +- 9% so I trust that in the long run I am profitable.
I set limits on the number of trades I make in one day. Since trading is not my only source of income I don't put as much pressure on myself to perform well. And I don't panic as much when I lose.
On any given day I can't make more than 5 trades. Per week thats an average of 15.75 profitable trades and 9.25 losing trades. On good weeks I'll make 18 good trades and on a bad week I'll make 13 good trades. which is still above 50% win.
This limits my profits but it also limits my losses. I'd rather live to trade another day than to risk it all on an unrealistic shot at instant wealth.