I do plan to backtest results in my own trade history, but I'm curious to know what experiences you guys have had with different profit targets for intraday trading. I currently set my profit target depending on the size of moves the stock is making that day. If AMD is generally making .40cent moves that morning, I'll set it for 35 cents from the peak of the pullback. This usually ends up at 2.3R-3.5R profit target. I scale out 1/4 at 50% progress, and another 1/4 at 75%. I don't know if this is the most optimal, but I know for sure that I'm not taking profit too early. What would be the arguments for going smaller, to 2R or 1.5R? Has anyone experienced greater profit with smaller targets?
You have to determine how often you hit targets. If you get your 75% target often, you would do better to exit all. Just do the math. In general, scaling in and/or out is not optimal from a trading pov. It feels good though. But that's a different topic. Use what works for you.
Yes greater profits with smaller PT because generally smaller PT are hit faster and more often. In addition, after you jump out the market is usually (but not always) going to go back below (except in strong BO) your exit (in bull case) giving you the opportunity to get back in at a lower price and compound your money after having already locked in some profit from your first exit. Hurst deals with the concept in his book. If one can time entries and exits pretty good then jumping in and out, over and over, is more profitable than holding for a bigger gain. Nevertheless, it is more stressful and one has to be watching the screen live. And make many more decisions which some folks find very stressful itself. And of course, more decisions to make also increases the odds of making more wrong decisions. Especially, on days when one is not in sync with the markets, for one reason or the other.
Have you ever heard of "cutting your losses short while letting your profits run"? When you use price targets, you're not "letting profits run".
I don't think that works intraday, too mainstream an idea, a 'run' is too rare compared to chop type events.
Disagree. It's frustrating to take a 2-point profit out of a 40-point move. It's bad enough when it happens because you get sucked out of a correct play, but it's even worse when "taking 1 or 2 points profit" is your strategy. One of my routine plays is to "risk 3 or 4 to make 12 or more". That's kind of a "day-swing" objective.
For some small profits taking is better, for some big profits taking is better. All depends on YOUR OWN system and your personality as trader. Conclusion: it is stupid to ask the question the OP asked, as each response will be based on somebody's own experience, so worthless for OP as he is not trading that system. OP is best placed to answer this question himself, but is apparently too lazy to do extensive testing on HIS OWN system, as that system will have to generate max profits. Or he is paid to start new threads all the time and ran out of inspiration. better answer would be to give the logic behind the system you follow to get max profits, that can then maybe be translated to the OP's system. I understand that Volpri takes small profits frequently and has good results. If I would do that I would make less money then I do now. I trade less frequently but my average profit per trade is much higher. So he would be nothing with my advice, and I would be nothing with his advice. There is no good advice that fits for all traders. A simple hypothetical example: A makes 30% per trade and does 2 trades. B makes 6% and has to do 9 trades for the same final result (before commssion). So it all depends of the various parameters that have an impact in the final result: profit per trade, frequency...