How to measure your trading time

Greetings Folks.

I wanted to ask a quick question about managing the amount of time you spend trading each given week.

Assuming every week you set yourself a profit target. If you happen to achieve that profit target on Monday of the week, should you continue trading throughout the week or leave it at that.

It might be the case that the market characteristic for this given week is perfect for your particular trading approach and therefore you might find yourself winning another 3 out of 4 days remaining as a result, whereas the following/next week might be the exact opposite i.e. terrible for your trading approach and mostly losses up to your max loss for a week.

Should one restrict themselves to arbitrary weekly targets or go with the flow of your performance.

My perspective is that you should continue trading throughout the week (assuming you’re able to, naturally), whenever your set-ups materialise.

The way I look at it is that either you have an edge, or you don’t: if you don’t, you shouldn’t be trading at all, but if you do, you should be applying it to the market as often as you can reasonably can, and there’s no benefit from dividing the time available into “chunks” (of whatever length) and stopping for the rest of that “chunk” after you’ve achieved the “chunk-target”: all that does is arbitrarily miss out on potential opportunities.

To me, the counter-argument to this view has about as much validity as the fallaciously-based methods of the horse-racing punters who like to “stop at a winner” (often increasing their stakes until they achieve one, not appreciating that if their system doesn’t make profits at level stakes, then in the long run it doesn’t actually make profits at all).

Disclaimer: I [I]don’t[/I] have a “weekly target”, myself, and wouldn’t want one - and I don’t trade very much on Mondays anyway, because mid-week days typically present me with so many more opportunities. (“Disclaimer-to-the-disclaimer”: I do have a [I]monthly[/I] “expectation” [U]in mind[/U], but it’s simply an approximate average of what I’ve made, per month, over the last 6 months, but it doesn’t influence the mechanics or frequency of my trading at all, and I certainly don’t stop for the month if I achieve it earlier than anticipated.)

Greetings thanks for the post.

I understand your point about the need for edge for sure. And I think it might be advisable to maintain a weekly/monthly/quarterly target looking at the possible scenarios.

Scenario One: You have a system with edge and therefore are able to meet your say, weekly target with reasonable consistency. In the event that the market does not meet the requirements of your setup you simply do not trade and therefore do not expose yourself to losses.

Scenario Two: You do not have edge in your system. Therefore operating a max loss for the week and suspending your trading to the following week reduces the overall loss rate to a quantifiable VaR and allows some time to reflect on the success or lack thereof your trading.

The drawback is missing trading opportunities. But I am assuming intraday trading based on technicals, so if fundamental or news or other ad hoc opportunities arise then one might still get in on them.

I am not convinced of either but that is a counter view.

I do not set any targets for my trading whatsoever. In my opinion, to do so is totally contradictory to the erratic nature of the market movements. To try to fit a regular level of income to a market that moves in totally irregular fashion as it responds to all kinds of input only makes life even more difficult - which is yet another reason why I always argue that trading as a sole source of income is extremely inadvisable and fraught with problems - unless it is short term and leading on to something else.

For me, trading is about capital building and a few “goodies” along the way. Therefore I let the market decide for me when to trade and which time frames to concentrate on.

Firstly, I also tend to ignore Mondays and I only trade London for first 3/4 hours and the NY for about the same time. I then look at 1D =>3H charts to gauge the underlying trade strength and also whether the price is consolidating or behaving nicely.

If the conditions look good then I trade. I would also argue that if one makes some good trades early in the week then why stop when obviously conditions favour trading? IF one has a target and it is reached “easily” then go for more.

Whenever I see the price zooming up and down from one candle to the next then I will back off totally or drop to even to a 5min chart and trade just a few pips per trade - just for fun.

But this is purely a personal approach that works for me, and I appreciate not much use to others!

For me also - very much so. As long as I make something from my bread-and-butter trades without any overall loss, I’m happy: the occasional “jam” from incidental, unpredictable runners will find itself, if my trade management and risk management allow it to.

Interestingly, you’re working very similar hours to mine (although we’re trading very different instruments and from different time-frames and chart-structures, too!).

Is “jam”, by any chance, a colloquialism for “shoes”? :smiley:

I don’t set any certain weekly targets but I do consider the eventual amount of losses that might happen. Conceivably if I had a profit target which was reached on Monday, I would continue trading throughout the week of course but not driven by greed. It’ll be only to see how the market will turn out in the next few days which usually are considered more dynamic and if I achieve some more positive results this might indeed compensate me for future non successful weeks. So my advice in this case is that you should trade even after the target is reached but with caution, you don’t want to fall into the greed trap and waste the achieved so far.

Thanks sebastiano. I continued trading today; so far lost 1% from the 4% gain yesterday and my 2 open positions are not certain. I’m edging towards the idea that conceptually trading based on market setups alone is the better option but practically from my experience it is better to leave it well alone.

Every time you enter the market you expose yourself to risk. Even a non edge strategy like any martingale based on technicals will take some time to “explode”, (i’m not using a martingale btw) in which case i’d rather have 3 months of consistent return before failure than failure after the first week.

Maybe not the best analogy but i’ve never lost in a game of Black Jack at a casino because I always check out as soon as i’m in a little bit of profit. Gambler’s ruins dictates that even with edge i.e. above 50% strike rate, the house will usually still ultimately win because of their deeper pockets, it takes just a few bad spells; unless of course your strike rate is 100%.

Yep looks like I might be 2% down today. Itchy trigger finger. Is that part of trading indiscipline.

Just keep trading. The only way out of a loss is to trade. The only way to make more profit is to trade. The only way to become a really good trader is to trade more.

You’re most welcome, Ropunzel. Don’t be too hard on yourself and don’t give up. Honestly I don’t think that any open position is certain because of the market’s incalculability. By the way you are absolutely right about that analogy with the casino as we all know at the end of the day the house always wins but if you’re smart enough you could get away with some very good profit.

I think there is the answer. If you hit your targets early in the week then reduce your risk for subsequent trading in that week, so maybe from 1% to 0.1%; get some practice in. If you start the week badly, you still have the rest of it to achieve your target.

At the risk of sounding like Tuvok, Seven-of-Nine or any other Star Trek characters, this really is “[I]totally[/I] illogical, Captain”.

It makes no sense to allow your position-sizing to be determined by recent outcomes: it’s just yet another variation of the “gambler’s fallacy”.

Either you have an edge, or you don’t: if you don’t, you shouldn’t be trading at all, but if you do, you should be applying it to the market as often as you can reasonably can and [U]at your appropriate position-sizing[/U], and there’s no benefit from dividing the time available into “chunks” (of whatever length) and stopping [U]or hugely reducing the stakes[/U] for the rest of that “chunk” after you’ve achieved the “chunk-target”; all that does is arbitrarily miss out on potential opportunities.

I totally agree with this. Unfortunately, it is a basic human characteristic to create habits, routines and yardsticks. But we all know that what you can earn is more a factor of what the market gives you than how you trade it. Sometimes the markets go really quiet, sometimes it jumps all over the place, and sometimes it just glides smoothly in a long, productive, trend.

If our market behaves like that then our earnings will also reflect that according to the opportunities offered. What is the point of curtailing a good run instead of capitalising on it? What possible significance is there how much we have earned (or lost) from Mon to Fri, or 1st day of the month to the last? We are conditioned to think like that because society runs like that, but in forex it is meaningless (except to the extent to which certain calendar times affect market volumes).

The only parameters that need to be focused on are the risk exposure and cash management factors as we trade (i.e. control). If the method has an edge it will then perform albeit in fits and starts - we need to recognise that and be comfortable with it.

That is exactly what I was thinking too. With the proper risk management, you could (and IMO you also should) continue trading. However as Sebastiano suggested in post #7 do not let the gambler in you take over.

The posts from lexys and Manxx define the difference between trading and gambling.

Trading is application of a player advantage which exceeds the house advantages. Whether you make a profit or a loss will depend on the quality of your edge. How much profit will depend on how often you apply your edge.

Thanks all for the post; I agree and disagree at the same time with the consensus opinion. The reality is that if had stopped trading on monday I would have banked 4% return this week (tick), rather than the 0.6% return I currently have. I dont believe any system with however many sharp edges provides an accurate enough predictor for intraday volatility trading based on technicals.

The proof of this is in the contrast and varied opinions in the professional market reports this morning for EURUSD alone; I don’t suppose to have more market insight in my system than Deutsche Banks or other institutional MM research teams. So why then do they apply the basic technical principles with their order flow visibility, IT infrastructure, qualified and well experienced staff and come to different answers.

I don’t think any serious trader enters a position with the intention of losing money. Presumably one spots an “opportunity”, applies their proprietary analysis and makes a decision to get in or not; yet not all trades you enter amount to a win for you, irrespective of the perceived edge in one’s system.

“Disclaimer…there is a risk involved in…”

Every time I enter the market I expose myself to the risk of losing money; not discounting the sheer brilliance of my trading system. If I have already hit my targets. What is the point of taking that risk.

If the week started of badly then for sure carry on within reason to apply your approach to achieve something in and around your goals.

The point is to make money by virtue of the fact that you have a net positive expectation (“edge”): if that isn’t a reason to continue trading, then it isn’t a reason to be trading in the first place.

I think the Edge question has already been settled. But net positive expectation by definition infers the negative contribution of losses. So this week I enter 2 trades 2 profits hit target 100% record (tick). Why stick around for the downside.

If you have a [I][U]positive[/U][/I] net expectation, it [B][U]isn’t[/U][/B] [I][U]down[/U][/I]side: it’s further [I][U]up[/U][/I]side (collectively).