Should You Stop Trading After Hitting Profit Targets or Not!? ️

by birtanpublished on September 18, 2020

In this video traders we are going to look at should i stop trading once i hit my profit target for the day stay tuned hey guys welcome to you thank you for joining me alright so this was a uh comment action one of the videos uh

That i did from lee who said should i stop trading when i hit a daily profit target even if i feel there's more opportunities appreciate your comment and question lee this is a

Really great question actually because um this is something that comes up very very often and there's different kind of schools of thought and we've had this discussion in the traders mastermind as well we've talked

A little bit about you know should you press more should you back off the throttle how should you deal with this and it's very personal you have to basically before you kind of

Decide what to do step back and look and see how you generally behave because if you generally get really frustrated when you give back profit so let's say you're up on the day

And you give back profits if that really annoys you you have to play that slightly differently from if you give back profits and you shrug your shoulders and go hey you know it doesn't matter too much and also you

Have to see how the knock-on effect is for the next day if you're up say let's say you're up a thousand dollars on the day and you've given back 500 if the next day you're always trying to get that 500

Back early end up giving back get digging a big hole for yourself then you need to play a little bit more defensively if you're the type of person who's up a thousand ends a day minus 500 doesn't

Affect you carries on the next there's a thousand thousand then you need to think of it slightly differently as well so always put your personality and the way you behave

And respond to things into your decision making process because what's what right for one person excuse me is often not right for another so that's worth thinking about as well but this is my kind of thoughts on it

The other day if you're in tune and you're trading and it's working well and you the market is is good and you're having a good day then keep trading keep pressing you know i don't think

Stopping is a good idea because guys the market is very cyclical in its nature you know and this is the same kind of throughout days throughout years throughout quarters

You know it goes in times when it's a very very uh good market to trade for years at a time then maybe it goes quiet same you might have a couple of months at a time and it goes down as well into

Lower time frames you might have a couple of days where it's very very good to trade and your strategy's working you're in tune with things it's great and then times when it's not and i'm a

Big advocate of pressing things when it's working for you now you know again there is a mindset thing to think about here in a discipline aspect an emotional aspect to consider but if we

Assume we've considered that now then i think if you have an edge and it's working for you to keep pressing that edge don't back off just because you've hit your thousand dollar target your 200

Target your 20 grand target whatever your target is for the day it doesn't make sense to back off from that if the opportunities are still there and so doing things like setting a max

Trailing stop so a max trailing stop on your loss so let's say that activates just like you're in a trade as soon as you get to a thousand dollars profit on the day you say to yourself

I'm not going to give back more than 250. so i'm always going to end up the day so since i've hit a thousand the worst case scenario is i end up seven up 750 on the day

For example whatever that number might be for you it doesn't matter the number but at least you're protecting it so you're not going to give back everything because what you don't want to do

Is have a great morning um a great morning session and then you come to your afternoon session you think you're going to press and then you press and you get back all the gains that's just devastating that's

Just the frustrating annoying loads of different reasons why you don't want to do that and you know conditions can change you might perceive this to be more opportunity

But conditions can change and you might just be getting stopped out you don't be trading on tilt so set a max trading stop that's the maximum drawdown you're prepared to take from your equity highs

Once you've hit that during the day and using that a thousand dollars example uh from earlier so number three guys is set a max number of losers so another thing to do and i would use this in addition to the mac

Trading stock is to say okay once i've hit my so-called profit target for the day again let's use that thousand bucks example i've hit my grand for the day and now i'm going to allow myself two

Losers or a maximum draw down of x so maximum draw down 300 bucks whatever we'd said or a max of two losers now obviously depends on the risk you're taking per trade

Or all the other variables that go into that but then it stops you from it's kind of a little bit of protection against you just thinking you're uh trading well and actually you just have to in the market

Conditions of change it's not quite the same so again we are protecting the gains but still giving ourselves the opportunity for upside so you know really but we're kind of

Considering it like a trade you know we've got a stop loss on our trade in terms of number of losers in that time terms of draw down from equity highs but we still have a bit of upside

Potential if we hit the throttle right and we're pressing well in that one could turn into two to three to five you know we don't want to stifle that our productivity or that productivity's not the right word but

The edge that we've got on the opportunity just by capping off a thousand but at the same time we're gonna give all the gains back so that's a really good strategy to use i think

The other thing is do you want to reduce size or increase size this comes back to the initial point at the beginning of the video guys which is how do you respond to things if you're very very um

Sensitive to draw down from equity highs it's one of the things you're working on as a trader um which is fine you know we're all trying to work on one thing at a time it's something that

You know we talked about many times before on the channel mastermind group working on one specific thing if you are working on that then you might want to once you've hit

That excuse that thousand dollars again an example a thousand dollars mark on the day you might say you know what i'm going to dial back the size a little bit i'm going to be a little bit more careful

Because i want to have that confidence i need to bank confidence and let's just digress very slightly that's not a bad strategy as well you know if you feel like you're lacking

Confidence if you've had a rough quarter rough month rough couple of weeks whatever it is and you need to build the confidence back up then by all means close on the day and go you know what

I've had a great morning it's fantastic i'm gonna bank that next morning fat you know it's not always about maximizing gains guys it's sometimes it's about building confidence up so that you can

Kind of feel a bit more foundation moving on to the next month or next month so you know it's not always just an objective looking through the lens of p l but going back to the lens of p

L reduce size might be the right thing to do because it might give you you might feel that once you're up a certain amount you start trading a little bit more aggressively you start being a little bit more blase with your

Orders so that might be a thing the other option is to increase size you know i'm a big advocate for this if you think you're in tune you're prepared to press the throttle down and

You're prepared to give back a little bit more then why not increase the size as long as you're managing the risk as long as you're keeping the position size sensible you're not just suddenly

Swinging there's nothing wrong with then saying okay things are working well the afternoon's setting up great for this specific trade i'm up a thousand bucks on the day i'm prepared to give back half of it on

One trade for example when normally maybe i only want to give back 250 i'm prepared to get back 500 setting up the trade that i like i'm going to double my position size and pressing it accordingly but then you

Know understanding that the risk is there with that but that's a potential opportunity and potential decision for you to make and the final thing guys this is slightly off topic is just watch out for

The next day so if you are up a thousand and you give some back just watch the next day you don't come into the next day carrying that baggage over saying okay i need to get myself back to

That thousand mark or let's say you stop you do a thousand it's put saying put another ground on the board you finish the day up two don't go into the next day thinking oh

I've got two to play with i've had a great day yesterday two little things you've got to be careful of when you're going into the next day after some kind of event day beforehand

Whether that's a draw down from highs well that's a doubling of profit or whatever it may be so just being mindful of that anyway that's my thoughts on it guys i'm sure i stopped trading once i hit my profit target for the day

Appreciate your question lee see you next one take care guys bye you

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