why stop after 2 points? - Psychology and Money Management | futures io social day trading
futures io futures trading


why stop after 2 points?
Updated: Views / Replies:2,418 / 26
Created: by disease Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

why stop after 2 points?

  #1 (permalink)
Trading Apprentice
kuala lumpur/malaysia
 
Futures Experience: Beginner
Platform: dtpro
Favorite Futures: TF,ES
 
Posts: 7 since Mar 2015
Thanks: 8 given, 2 received

why stop after 2 points?

Hi, i notice that quite a lot of people have a strategy that stops trading after hitting their goal and quite a number of people have a USD100 per contract per day goal.

Would like to know why stop after achieving the 'goal' if you have a edge and a positive r/r strategy?

Btw, I'm really new to trading. trying to figure out things here... thanks!

Reply With Quote
The following user says Thank You to disease for this post:
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Banned: Vendor self-promotion
Phoenix AZ
 
Futures Experience: Advanced
Platform: IB
Broker/Data: IB
Favorite Futures: NQ
 
DbPhoenix's Avatar
 
Posts: 470 since Dec 2012
Thanks: 95 given, 1,543 received


They say you never grow poor taking profits. No, you don't. But neither do you grow rich taking a four-point profit in a bull market.

--Jesse Livermore

Reply With Quote
The following 5 users say Thank You to DbPhoenix for this post:
 
  #4 (permalink)
Market Wizard
Sarasota FL
 
Futures Experience: Intermediate
Platform: NinjaTrader, Sierra Chart
Favorite Futures: ES
 
Posts: 3,635 since Jan 2013
Thanks: 26,759 given, 11,115 received
Forum Reputation: Legendary

Answer
This post has been selected as an answer to the original posters question Answer


disease View Post
Hi, i notice that quite a lot of people have a strategy that stops trading after hitting their goal and quite a number of people have a USD100 per contract per day goal.

Would like to know why stop after achieving the 'goal' if you have a edge and a positive r/r strategy?


DbPhoenix View Post
They say you never grow poor taking profits. No, you don't. But neither do you grow rich taking a four-point profit in a bull market.

--Jesse Livermore

You can actually end up losing over time, because you're going to have losses too.

If you cut your profits too soon, there will be less cushion for when the losses come. Theoretically, it might seem that if you are completely disciplined and also cut the losses early, you can still be OK -- and, indeed, that can work out.

But:
(a) you're not a machine, and you may have trouble with closing that loss quickly. If so, your 2-point profitable trades give you very little breathing room for error in your losses.
(b) you can't expect to get perfect fills
(c) trading for such small wins probably puts you in the noise, where exploitable opportunities are hard to see and take advantage of.

Certainly people can and do, but it can be harder than it appears.

Having a fixed profit target, large or small, is one way that people try to corral risk -- you put the money in your pocket and the trade is over. No more risk. This can work, and if it's part of a thought-out method that makes money over time, then fine. But an alternative idea is to hold a trade until it stops working. This may keep you in for the large moves... assuming that you have them.

You may want to adapt the method to what you believe the current character of the market is: use targets and quick exits in a ranging market, hold longer in a trend. (Always assuming you know which is which .)

So basically, it's a kind of balancing act, and you have to make decisions about how to play it based on your method, risk tolerance and what you can make work over the long haul. There's usually more than one way to decide these things.

Bob.

Reply With Quote
The following 6 users say Thank You to bobwest for this post:
 
  #5 (permalink)
Trading Apprentice
kuala lumpur/malaysia
 
Futures Experience: Beginner
Platform: dtpro
Favorite Futures: TF,ES
 
Posts: 7 since Mar 2015
Thanks: 8 given, 2 received

Thanks Bob, that made a lot of sense.

I haven't figured out what kind of strategy to use yet. The strategy of stopping once target is met seems to be one which notice quite a bit when people talk about stopping for the day.

Reply With Quote
 
  #6 (permalink)
Elite Member
milpitas, ca, usa
 
Futures Experience: Intermediate
Platform: Tradestation
Broker/Data: Tradestation, Ameritrade
Favorite Futures: ES, Gold, 10 Yr
 
rahulgopi's Avatar
 
Posts: 1,583 since Feb 2014
Thanks: 1,144 given, 3,525 received

Answer
This post has been selected as an answer to the original posters question Answer


disease View Post
Thanks Bob, that made a lot of sense.

I haven't figured out what kind of strategy to use yet. The strategy of stopping once target is met seems to be one which notice quite a bit when people talk about stopping for the day.

Most often such a strategy is employed by people who trade part time or as a hobby. Usually they trade few hours due to time constraints. If you are a full time trader, limiting your profit is not really profitable in the long run. If you run a business selling milk, will you stop when 10 carton of milk is sold ? You may survive but there wont be much progress years ahead.

If you trade to contain your risk, you will be a breakeven trader at the most.

Reply With Quote
The following 5 users say Thank You to rahulgopi for this post:
 
  #7 (permalink)
Elite Member
New York, New York, United States
 
Futures Experience: Beginner
Platform: TOS
Favorite Futures: Options
 
vitrader's Avatar
 
Posts: 53 since Jul 2015
Thanks: 13 given, 6 received


disease View Post
Hi, i notice that quite a lot of people have a strategy that stops trading after hitting their goal and quite a number of people have a USD100 per contract per day goal.

Would like to know why stop after achieving the 'goal' if you have a edge and a positive r/r strategy?

Btw, I'm really new to trading. trying to figure out things here... thanks!

I don't consider myself a great trader, so take what I say with a grain of salt, but I think it has to do with not giving profits back, staying fresh and level-headed, etc. Also commissions add up and can cannibalize one's profits.

Reply With Quote
 
  #8 (permalink)
Elite Member
New York, New Jersey/USA
 
Futures Experience: Intermediate
Platform: NinjaTrader
Favorite Futures: Futures
 
Seahn's Avatar
 
Posts: 157 since Jan 2013
Thanks: 60 given, 250 received

I view trading as a job, as such my own goal is to make consistent daily profits (more than $100 though). When I reach my goal I stop, usually before noon, but not on days like today, making money is just too easy today.

From experience (and paraphrasing Al Brooks) I have found that if you try to pick too many cherries you end up picking a lot of bad ones, better to pick a few good ones and quit when you are ahead.

Reply With Quote
The following 2 users say Thank You to Seahn for this post:
 
  #9 (permalink)
Normal Wizard
Sydney, NSW, Australia
 
Futures Experience: Intermediate
Platform: NinjaTrader with Jigsaw DOM
Favorite Futures: CL, 6E, ES, Piano
 
TickedOff's Avatar
 
Posts: 191 since Nov 2014
Thanks: 163 given, 195 received

Makes no sense to me. Maybe you hit your target in the first hour, and you have a positive expectancy with your trades. Meaning, on average, if you continue to trade during that day you make more money. So you are losing out. Only reason you should stop is if you think your edge is gone. You are fatigued/mental state not adequate, or market is not suitable for your methodology. Otherwise, stopping early is playing to lose. Its scared trading.

Understanding yourself is just as important as understanding markets.
Reply With Quote
 
  #10 (permalink)
Elite Member
Washington DC
 
Futures Experience: Advanced
Platform: Sierra Chart
Broker/Data: Tradovate
Favorite Futures: US Treasuries
 
fminus's Avatar
 
Posts: 103 since Sep 2009
Thanks: 148 given, 233 received


I see this more as a lack of confidence in trading ability. I guess the fear of giving back profits is the dominant theme in this behavior. I was here once (raises hand).

I can understand how someone would want to limit draw down so they don't blow up an account but limiting upside doesn't really make sense to me. When you know you're out of touch with the market, it's best to just take your ass kicking and live to fight another day. However, cutting yourself off early is the equivalent of the mistake to taking profits too early.

I never once saw Michael Jordan stop taking shots at the basket because he reached a goal and didn't want to miss shots.

In trading, shortcuts lead to the longest path possible.
Reply With Quote
The following 3 users say Thank You to fminus for this post:

Reply



futures io > > > why stop after 2 points?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Combine ATR stop with Hard Stop robz75 EasyLanguage Programming 1 January 26th, 2015 02:31 PM
Trailing stop using emini points robz75 EasyLanguage Programming 2 September 19th, 2014 09:10 AM
Fee's For Stop Loss / Trailing Stop rkersh409 Reviews of Brokers and Data Feeds 3 May 29th, 2014 05:15 PM
mouse click for Buy Stop and Sell stop On NT7 lexxmd NinjaTrader 8 May 15th, 2014 09:46 AM
Ninjatrader strategy for Trailing Stop and stop loss. skann NinjaTrader 2 August 20th, 2013 08:34 PM


All times are GMT -4. The time now is 09:50 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-15 in 0.15 seconds with 37 queries on phoenix via your IP 54.91.171.137