What's your short term goal or reward for profitable trading?
There are a couple of threads in futures.io (formerly BMT) about life goals with very few responses.
What I want to share and know is about short term goals. i.e Weeks or Months from now.
I realized from my experience of going to gym that long term & vague goals don't work for me. Example include having a healthy body, 6 pack, bulging biceps, Tarzan looks etc don't motivate me. Specific objectives like 10 lbs loss, 3 inch hip reduction in 3 months is lot better for me.
I know I want to be full time successful trader, earn mountaintop house from trading, play with my kids whilst working etc but that won't motivate me much.
Hence I decided on my short term goal.
My goal is to earn 10,000 dollars in 5 months. That money will be used to have my Hair Transplant surgery!!
this could be a next to impossible goal if you start from a poke of $1000 unless you take risks that could have everything blow up in your face. Or it could be trivial if you have $500,000 invested... you could do this easily in a bullish market with little risk.
A typical return for most investors is something like 7%-15% of what they started within a one year period. If they do more than that they have had a great year... if not then a review of what you did versus the general market would tell if you did well or not (eg... making 4% in a year where the market lost 10% would be a great year in my books).
You cannot predict the future like that and by setting such goals you add a layer of stress that is unnecessary.
My goal is typical of normal investment expectations but I don't get hung up about it. In my 10-12 years of investing I have made 39%(2009) and lost 45% (2008) of my holdings but usually I stay in the normal range expected.... the future is what it is... all you can do is do your best to succeed.
I am fairly new to futures and I realise that my goals are ambitious. My aim is to have a fixed target amount and time so that I will focus more on risk reward. My methodology is in my journal. I am still SIM but going live in 1 week. Though my calculation below is more appropriate in my journal, I will post it here for the sake of clarification of my 1st post.
I have a 50k account for 2 years now but I am too risk averse and hence my gains were never more than 10%. On the positive note my biggest drawdown was also less than 10%. I am a 1 lot trader. Add my cautious personality and you can see why I don't get many runners.
I have been sim trading 2 lots for a week. My goal is sim trade 3 lots next week and then go live.
My goal is 2000$ a month, meaning 500$ a week or 400 ticks. That's a hefty 80 ticks a day. To avoid overtrading, I set myself max 4 trades a day and hence 20 ticks profit per trade. Now, that's what I call a Miracle! I am glad you asked how I will reach my goal.
My plan is to let the 3rd lot run after securing 12 ticks(in total) on my initial 2 winners. I will review my trades weekly to optimise my scaling and sizing strategy.
I find it really dangerous to have fixed P&L targets because you're setting a target in a context without considering the market conditions to get them. It's like saying, you see this beacon three miles away from the shore that you want to reach, but regardless of the conditions be it calm waters, or 10 ft waves, you're going to swim out there every day to get to the beacon.
Maybe instead you should swim out there twice in one day during no choppy waters, and some days/weeks you just stay out of the water.
Perhaps a range of outcomes might be better, or focused on the risk metrics would be better still.
For example, one of the metrics used on my end is to have weeks that end no worse than break even.
On the up side:
5-10% per month on a day trading account (say under $100k) seems feasible.
But if course in the majors, just having a 10% net of fees is already considered a stellar year.
The following user says Thank You to MacroNinja for this post:
I think you will find that real trading with real money will be a lot different than SIM trading.
So far I see in your goals...no accounting for any bad trades... everything moves forward with constant winners. Now I don't trade futures and I don't use tick charts but from reading here, I think a 20 tick profit per trade seems rather ambitious given your experience to date.
Discipline to stay small, stick with a minimum 3-1 payout and not to revenge trade. If I am even after the first month, I will have done my job well. Anything plus will permit me to be ecstatic. I'll leave the number crunching for you guys.
To accomplish that goal I have to define what perfectly is. Therefore I have to have a checklist of what has to happen before I enter a trade, a checklist of what has to happen before I exit a trade and risk management plan.
I review each trade not to see if I made any money but to see if I followed my plan. A losing trade can be a perfect trade if I followed my plan.
By focusing on the results rather than the process you may tend to reinforce bad trading practices when you get lucky and make money trading on impulse and breaking your trading rules.
As for the hair transplant; it is how you act rather than how you look that will impress people. If you want to feel real good about yourself take the 10K and help someone who really needs it.
It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
The following user says Thank You to deaddog for this post:
I realise that having a monetary goal sounds like a recipe for failure. It probably is. I hope I didn't come across as arrogant or naive. I don't want the new traders to focus too much on Profit/Loss.
My reasoning to choose 10k goal in 5 months was to have a measurable objective. The real objective is to have hair transplant. Though I am able to spend 10k for that non essential procedure right now, I want that as a reward (for sticking to my trading plan with discipline - which is harder to measure).
MY goal is to have 'don't care' approach to trading. The worst case scenario for not succeeding with my goal is to remain bald!! I think I can live with that.