I wanted to assess how most of the traders set achievable targets for themselves in their trade plan and also what their targets are?.
Are your targets based on daily achievements or are they based on weekly or monthly time periods?
While discussing with other traders, I get the feeling that most of the targets fall into these categories: (can be Daily Target or Weekly Target or Monthly Target)
1- Making a certain amount of DOLLAR figure, say $500 or $200 etc.
2- Making a certain number of PIPS, say 60 or 25 etc.
3- Making a certain PERCENTAGE of your Trade Account, say 1% or 3% etc.
So what is your thought on this aspect? And if you don’t mind can you be specific about your personal target. Any input would be greatly appreciated.
I set a monthly target of 6% for myself. That number is pretty arbitrary but it works out to be 100% annually if all earnings are compounded. Honestly I just picked that number because it was round and sounded like a good return. Not much thought went it to it.
It may be important to note that my goal in no way affects my trading plan. I stick to the same routine every day and limit my trade size to 2% max risk per trade(often less than 2%, but that is absolute max). I trade all the setups that I think are worth trading and set my stops and profit targets according to each individual trade. I never think about my daily/weekly/monthly/yearly goals while I’m trading. I only reflect on that progress after my trading is completed.
I’ve only been trading live for 3 months now so the goals haven’t needed to pay bills or anything yet. This is still just a hobby and I am still learning and improving myself. If I had to live off this account those goals would probably be more important, but I find proper risk management has allowed me to not have goals and just focus on the trading. The money will come if I make quality trades with good risk management.
I just realized that my post probably didn’t answer your question or help that much. Sorry.
Its really nice to hear that you have been trading for just 3 months and thinking of making 6% with 2% risk is awesome. Sounds like the rules have not been broken. Good Job !
I always aspired to achieve financial freedom through forex trading business which am yet to achieve. And my target is monthly target. I wish to reach 600 pips every month.
Whatever target you set, make sure its realistic.
Dont set targets too high just because it sounds good, this could have 2 effects 1) you take risks because you are not hitting your targets, 2) You get depressed by your failure to hit targets.
A broader, vague target like “try not to lose more than 50% of account in year 1, move towards breakeven in year 2, move into profit in year 3” is probably a more realistic approach.
You have to treat fx as a business, not a “make a wish and see what happens” venture.
Best of luck
Another target you can look at is the reward-to-risk ratio per trade. I agree with eddieb in saying that you should set realistic targets so as to not set yourself up for failure and end up feeling disappointed all the time. Besides, aiming for high percentage wins all the time might not work out in some market environments so you should be ready to adjust your expectations from time to time.
Thank you all for sharing your opinions and experiences.
Here is what I strive for:
To make average of 45 pips per day while using 2% of my account for the trade. SL set at 30 pips (RR ratio of 1.5). Contract size determined by the risk dollars available by using 2% of account. My target is to have 500 trades during the whole year with a 60% win rate.
Now you get the picture for my trade plan profit target. That’s the kind of information I was looking forward to assess how the majority works.
I’ve never looked at it in terms of a number of dollars.
I’ve very gradually switched, over the course of many years, from looking at it all in terms of “numbers of pips” to looking at in “R-terms” or “PF-terms” (“profit factor”) and measuring, recording and analysing everything according to the [U]returns in comparison with the funds risked to achieve them[/U].
This latter method seems to me to be the most absolute, the most helpful, the mostly directly comparable and the most objective, and I’ve come instinctively to regard anything else as “inferior”.
I routinely look at every individual trade, and at every day’s, week’s and month’s results, and at every system/method’s collective results from that perspective.
I [I]think[/I] that [U]most[/U] professional traders (and perhaps all institutional traders) would probably agree with this approach.
Unfortunately, especially for people who scale in and/or out of positions (and I strongly suspect that the more you’re looking at “successful traders” rather than just at “traders”, the higher that proportion is), it’s also the most complicated and difficult way to track things.
I don’t claim to have “got it right”, even now. But I’m entirely happy that I’ve “got it right [I]for myself[/I]”.
From what you have written i think it shows that as you have gained a deeper understanding of what you are actually trying to achieve your method of measuring your gains both realised and potential has changed. I would find it interesting, and i’m sure others would too, if you would elaborate a little on how you feel this change has helped/ helps you in your [B]day to day trading[/B], especially with regard to expectation, losing streaks, performance etc.
I’m not sure it’s particularly relevant to my [I]day-to-day[/I] trading, really, to be honest: it’s more to do with system-selection and position-sizing?
I’ve selected most of the types of trades I take on the grounds that (i) each distinct type is well and reliably proven to be profitable overall after backtesting and forward (“out-of-sample”) testing, with an adequate profit factor to be worthwhile, (ii) they suit my trading style (no overnight positions etc.), (iii) they’re tradable on instruments and time-frames I know well so that I don’t need different/unusual/complicated charts for each, (iv) however high the profit factor, they don’t have serious prospects of long losing runs, which would unduly complicate my position-sizing and active trade-management, (v) they don’t need indicators, (vi) they arise often enough to be viable and worth identifying, and so on. Not at all sure I’m answering what you actually asked, now, though … :8:
Earlier i used target the money, amount of USD to be made. But now i have been targeting the number of pips need to be made and this has been working fine for me.
Indeed … and sorry if I was slow to appreciate what you were asking, here. :8:
To distribute my risk/stakes more appropriately, in accordance with their potential returns (i.e. so that I don’t exclude anything which is otherwise perfectly manageable and does have a positive net expectation but so that I still get the most out of the higher-PF methods): it makes it a bit easier to compare different trading-systems on a like-for-like basis, without any residual questions about whether you’re comparing apples with oranges.
Not much, really: though I suppose it’s a “confidence-boost” to know that you’re doing things “professionally”.
No problem, your initial answer also had points of interest.
Sooooo, you know the true edge of every game in your casino and can allocate floor space and layout accordingly ([I]resources[/I]) .
I’d like to know if you’ve done any work on “in game odds”, ie taking partial profits and or compounding, reducing Sl’s etc in various pre-defined conditions and their effects on expectancy as there doesn’t seem to be much discussion, general or otherwise about making the “right” move based on stats and price action going on. ([I]I guess the amount of data involved is a deterrent[/I])
I don’t wan’t to hijack this thread any more than i already have so we’ll leave it for now. Sorry op.
Hi,
I am new here. Must said this website is very helpful and educational.
I would like to ask a question which I think its relevant to this topic.
If I open position for XAUUSD and enter with $1200 and if it keeps dropping to $1100 how can I prevent loss on this trade because that’s a $100 per ons and its a big difference if I buy like 100oz.
I’ve been trading for more than 26 years. One thing that I think many Forex Traders need to remember is this. The Forex Market does not owe anyone anything. Understanding this then your trading will be much easier. The object or name of the game is to enter the market with the understanding that each of your trades may in fact be a slowing trade and you are okay with losing that predetermined amount of risk each time.
Professional Traders look reasons why NOT to enter a trade and then after weeding our low probability trades they enter the market with a well planned out exit strategy plan in place. Any other method is paramount to gambling.
I totally agree that no-one should be trading without a “Trading Plan” that is complete with his/her rules for their trading strategies, which also has a well thought-out and defined risk management and draw-downs strategies.
95% of Retail trades lose for a reason. One of those reasons is having false expectations i.e. what they “think” they can get from the Market. There are so many LIES told to new and inexperience traders.
However to answer your question I trade and look for only high probability trades using Naked Price Action. I never risk more than 2% on any given trade and often less than that. I trade Daily and Weekly time-frame just like the GREAT Fund Manager George Soros, Bill Lipschutz and Stanley Druckenmiller. Learn from them and it just might keep you in the game long-term. There is absolutely no need to reinvent the wheel.
I look at pips, bucks, percents and win and loss ratios. Tracking what I am doing and adjusting my plan. Lets say my goal in $500.00 a month with a 5K lot. That is 1,000.0 Pips (50.0 pips per day). Min win is 750.0 pips, average is 1,000.0 pips, best is 1,250.0 pips (per month). Then I break this down with win to loss ratio, percentages and bucks. This how I have been working my plans on excel. There is more too.
I don’t plan properly every step, but have a minimum goal to make $700 in a month. If I get them, my trading strategy works good, if not - it’s time to analyze what was done wrong and what I have to fix.
