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Personally, I prefer using a weekly goal rather than a daily one.
This gives me the flexibility to skip trading on days when the market isn't setting up to my liking. And on those great days where everything is clicking, I stay in and bank profits.
When I'm able to hit my goal for the week on Tuesday or Wednesday, then I enjoy the time off until the following Monday. After all, I'm trading to live, not living to trade.
And therein lies the question and why this thread has been rightly posted in the psychology section. Just a few short months ago I also had the mind set that you should just trade all day with no daily target. But that was when I was still swing trading. Now that im day trading I can see the huge psychological aspects present.
One of the big things to deal with is not wanting to give back profits that you've already made. I've experienced a tendency to trade differently and more conservatively the more profits I make for the day, because I dont want to give back what i've made. If I had zero emotion, I would simply take the next trade regardless, but that isn't always the case.
Another aspect worth considering is if your average winning day based on the last year is for example +$100. Then on a particular day you are up $250. That is over double your average. What is the probability given your average winning day for the last year, that you will continue to hit on winners for the rest of the day instead of giving a lot of it back?
Personally I haven't come to a final decision on this and which I feel is better for myself. But I have come to realize that a lot of thought needs to be given to both options.
Personally I prefer a weekly goal. However, my goal is a target! I found that if you focus too much on hitting your goal, your trading decisions tend to change as you approach that goal. Especially if you are falling a bit short near the end of the week.
I have found that having daily, weekly, or monthly goals only adds unnecessary pressure and pushes me to overtrade to say the least.
It was a psychological barrier also responsible for me not taking profit at resistance/support, when my target was let's say 250$ per day and I reach close to 240$ in a trade then I say to myself: oh I will wait a few more minutes, it is just 10$ more that I need, etc... only to see the position reverse on me and perhaps even go negative at times.
On the other hand, it is not like when I reach my daily target I immediately stop trading (or used to).
But I had also found; that I would start thinking of making reserves for next day or next week, and it is not always a good idea as you inevitably fall in overtrading again and that's after some euphoria of having reached my target -> very bad!
The thing that really made a difference to me is when I started thinking and treating trading as a real business, with the professional approach and responsibility that any business owner would bring to his own company.
After all, a restaurant do not kick its clients out when the daily target is reached, similarly that same restaurant won't despair and fire its employees if on some days they receive no client and make no profit at all (only losses)...
The income fluctuations shall be similar to what any shop, supermarket, restaurant, barber, travel agency, taxi driver, etc... you name it.
On some days you shall be trading, and some others you SHALL ABSOLUTELY NOT.
You can't force trading everyday and for a constant return too...
Of course that's just my own experience, and personal opinion on trading as a business; it is definitely easier to understand for an independent business owner than it is for a full time employee used to receiving fixed income on a regular basis.
Successful people will do what unsuccessful people won't or can't do!
I think there is no value in setting a monetary goal for the day, as it is simply out of your control, and depends largely on the market that day.
However, I do think it's good to know what your largest winning days tend to be, and if you surpass that number, consider calling it a day. Many will disagree and say that "a casino does not close its doors when it makes more than usual" or just as Fadi said, "a restaurant does not kick out clients when its daily target is reached." However, a restaurant cannot lose money by accepting more clients, and a casino is 100% probability, no mental issues, no psychology, and the games do not change. But a trader who continues to play can lose money. A trader who averages $200 per day and who has largest winning days of $500 or $600, can begin to behave differently when he makes $600 in a day. I think it's great to push the envelope of what a max winning day is for sure; but once this is accomplished, what is the likelihood that you will be much better than your best (you have already been much better than average and as good as your previous best), versus the likelihood that you will give some of it back? Steady progress over time is key; having a super big winning day may feel great, but it does little for consistency over the long haul. Just my opinions and not right or wrong, just currently how I operate based on my own progress and belief system.
Edit: just realized I made some of the same points DarkPool made earlier, it seems I copied the thoughts from his mind
... and how did the trader achieve the $500 or $600? I mean, at some point the largest win was only $300 or $400... or the average was only $100 or $150...
Just watched a Jim Dalton webinar, and one of the things Jim talked about was managing risk. He said that when he was managing a small brokerage, one of the biggest mistakes small traders made was TRYING TO MANAGE RETURN. YOU CANNOT MANAGE YOUR RETURN, instead it's best if you MANAGED your RISK and returns will come.
