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Daily profit measured by volatility
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Daily profit measured by volatility

  #11 (permalink)
Market Wizard
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Silvester17 View Post
@Big Mike

how did get that number?

mine is more like 12.50 points for rth session.

I think I made a mistake. it's more like 11.02 points adr for 48 trading days so far this year.

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  #12 (permalink)
Freemason
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Big Mike View Post
New poll on forum homepage, please vote there and discuss here.

What is your daily profit objective, per contract, as measured by % of ADR (average daily range)?

For example, if the average daily range is 40 ticks, and your objective with 1 contract is to capture 4 ticks, that would be 10%.

Mike

I think your wording may be kind of confusing, I would switch the ticks and the percentage. Something like, if the adr is 40 ticks and your looking to capture 10 percent of that, your goal would be 4 ticks. Same thing just slightly different because your objective is the percentage, the ticks are just what it currently equates to.

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  #13 (permalink)
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It should not...


be a surprise. @Big Mike.

I've been trading over twenty years and I have never heard of a daily profit goal as a percentage per contract of average daily range. Maybe I'm old school or a retard...but I intend to make more than the entire range every day on a per contract basis. Why would anyone design to make less than everything offered during the time they where open for business? A daily goal short of perfection in my mind is a limitation.

While ADR is remarkably constant, I have no way of knowing what it will be or when it will or wont move so the concept is not something I am familiar or comfortable with. Like almost everyone I have losing days from time to time. Some days I leave the desk and read a book. I fish every time I get an offer. If I don't have anything better to do I trade. When I trade I try to take every penny.

Could you explain the metric please? I'll read the post again to see if I understand better after dinner. DB

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  #14 (permalink)
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Still ...

Do not understand. Is it important to have such a goal defined this way? If it is, whose authority makes it so? I would define a day in which I captured a number of ticks greater than the daily range as a good day. But that is not what you mean, I am sure.

Should I have a daily profit goal?

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  #15 (permalink)
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Silvester17 View Post
I think I made a mistake. it's more like 11.02 points adr for 48 trading days so far this year.

Can you post your bar data in the Homework thread, so we can compare the bar data I used vs yours?

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

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  #16 (permalink)
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wldman View Post
be a surprise. @Big Mike.

I've been trading over twenty years and I have never heard of a daily profit goal as a percentage per contract of average daily range. Maybe I'm old school or a retard...but I intend to make more than the entire range every day on a per contract basis. Why would anyone design to make less than everything offered during the time they where open for business? A daily goal short of perfection in my mind is a limitation.

While ADR is remarkably constant, I have no way of knowing what it will be or when it will or wont move so the concept is not something I am familiar or comfortable with. Like almost everyone I have losing days from time to time. Some days I leave the desk and read a book. I fish every time I get an offer. If I don't have anything better to do I trade. When I trade I try to take every penny.

Could you explain the metric please? I'll read the post again to see if I understand better after dinner. DB

Hi Dan,

It's just an exercise to get people thinking. I know of several big traders who think this way, but I am not surprised that most don't. It's also entirely possible my wording has lead to a lot of confusion.

So let's say the ADR is 40 ticks. My goal is to ask people how much their daily profit objective is, in terms of % of ADR. You need to calculate this on a 1-lot basis. If you take 10 trades a day for 4 ticks each, regardless of position size for each trade, then you would get 40 ticks or 100% of ADR. Of course other answers could even be more than 100% of ADR, although I think if someone honestly reviews say 100 or 1000 live trades, that is improbable.

Personally I also factor in commission into this. So net ticks per 1-lot / ADR.

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
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  #17 (permalink)
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wldman View Post
Do not understand. Is it important to have such a goal defined this way? If it is, whose authority makes it so? I would define a day in which I captured a number of ticks greater than the daily range as a good day. But that is not what you mean, I am sure.

Should I have a daily profit goal?

I just want to get people thinking. Discussion about such things is fruitful in my opinion, much more so than discussions on where to enter a trade or what indicators are showing.

I am sure there are smarter or more accurate ways to frame the question.

Is it important? Well, it is important to me. It is important to several other traders whom I respect. But we are all different naturally.

If I am only taking 10% out of the market daily, then to me that is a useful metric and something which I can look to improve. It means the market gave me a lot more opportunity than I was able to capitalize on.

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

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  #18 (permalink)
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Thanks Mike...

I will take a look at that as a performance metric. Still a little hard to define for me. Like asking a baseball player what his goal is for reaching base. Wouldn't the answer be every time. The metric, on base percentage would include a couple different items, but I'd say that a player whose goal is less than 100% is not worth his salt as a pro. Now there is a difference between goal and performance metric as both trading and baseball are not "games of perfection" Either way, I do not have a specific goal in ticks or dollars or % of range.

I want to trade well. To trade well is to make lots of money. So each day I review each trade for it's specific result and against what opportunity was there at the time. Sometimes a 50 tick trade is a failure and sometimes a 7 tick loser was a great trade. My goal is to trade well, the rest takes care of itself.

When you hosted that author Denise she mentioned something that I sort of did, but since I absolutely do. That is to focus on the bottom 20% of trades and look to improve or eliminate. It is a freaking beautiful thing when the bottom 20% of a period's trades includes winning trades. I believe that if my focus is there, on trading well that is a better metric, goal, outcome than hitting a percentage of a daily range. Does than make sense? Thanks for the interesting poll question and debate. Dan

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  #19 (permalink)
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Better said


Big Mike View Post
I just want to get people thinking. Discussion about such things is fruitful in my opinion, much more so than discussions on where to enter a trade or what indicators are showing.

I am sure there are smarter or more accurate ways to frame the question.

Is it important? Well, it is important to me. It is important to several other traders whom I respect. But we are all different naturally.

If I am only taking 10% out of the market daily, then to me that is a useful metric and something which I can look to improve. It means the market gave me a lot more opportunity than I was able to capitalize on.

Mike

I think now you're getting to the heart of the question. The distinction between a goal and a metric is what could be confusing. Perhaps what is helpful is to know what % of daily ATR are you capturing on average. Secondly what % of ATR do you seek to achieve in your trading. Some would suggest the second question should always be at least 100% but perhaps frame it in terms of next steps.

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  #20 (permalink)
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Big Mike View Post
So far the early voters are indicating they don't have a plan to capture a certain amount of movement from the market.

Why does this not surprise me?

Mike

I think it also depends how you trade, what kind of a trader you are.

here're some extreme examples:

- the market shoots up 50 points, one big move, one swing. but it doesn't offer me a good opportunity to enter on a pullback. so the adr is 50 points and I don't get anything.

- now the market goes up 10 points, then down 10 points and up 10 points etc. it does that 10 times. so 10 x 10 point swings. the adr is still 10 points. but I might be able to catch 5 points out of every swing, leaving me with 50 points at the end of the day.

like I said those are extreme and not very likely examples, but you get the idea. so to compare your trade results to a naked adr number doesn't make much sense to me.

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