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How do you as a profitable trader decide when you've made enough ticks for the day? Do you have a formula, a specific number of ticks or do you trade a specific number of minutes or hours during the day and settle for whatever you make in that time frame?
How did you arrive at your "enough is enough" decision?
Thankfully, as a long term trader I don't have to face this issue.
We take what we get...if the portfolio's daily gains are positive we are happy. If it is negative, hopefully it is small and of little consequence. If it is great under each circumstance...well we can have a drink to celebrate our wisdom or drown our sorrow or not
For me, trading, as a performance activity, is all about process. It simply cannot be about the scoreboard. This way of thinking brings an entire truckload of human error into decisionmaking.
Yes time considerations are there, but again that's market generated information, not looking at the scoreboard. I say trade as long as conditions are conducive for your specific trading style.
Mark Douglas, who I am a big fan of, says that there is a random distribution between our winning and losing trades. Given that you and I range from 40%-60% winners on any longer term sample size, it indeed does seem like a random distribution. The "best looking setups" are often losers, and the worst/scary ones are often the winners. It's our job to take our edges when they show up, predefine our risk, accept that risk, and pay ourselves as the market makes profits available to us.
We also know that for any trader, the bulk of his net winnings at the end of the month/quarter/year comes from a very small handful of trades.
We also know that some days may be more conducive to profitable trading than others. This would mean certainly have a daily loss limit to protect yourself from bad days, but to keep trading when you're seeing things well on the day since conditions are good. For me this has been the hardest part. My risk seeking nature increases when I'm down, and greatly greatly reduces when I get up for the session. I constantly have to fight this instict.
I quit when the brain starts to turn to mush. It is a feeling of no longer being able to deal with trading. Kinda hard to describe, but most of you know what it is. Another point that I stop at is when having a good day, and market goes flat. I don't keep trying to squeeze out trades just because I'm have a good day. Also quit if hit the negative magic number that says I'm not having a good day. A normal day, quit at 11:00 ct ish. 6 hours of trading is enough for me.
I just take what the market gives me. There's some equation like how conducive is the market to my method divided by how mentally exhausted I am equals how much I can make or lose.
But it's something I try not to think about much. I'm lucky enough to make a lot of money in a day so the last thing I want to think about is how much is enough when I'm usually trying to play catch up. If I'm not playing catch up I'm trying to catch up to where I think I should be in my life. So more is a good answer.
R.I.P. Joseph Bach (Itchymoku), 1987-2018.
Please visit this thread for more information.
I take what the market gives with no daily limit. What you do each day is not an island to itself but a part of your larger system. So everything has to be looked at in context of larger system. Not saying you could not have a daily tick target but if do need to have good stats that tell you this is what works best for your system. I come from the school that are many ways to do all aspects of trading but need a statiscal reason for why you are doing it.
"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
