I agree. To the original poster: I would suggest basing your daily goal on volatility. The goal would be to extract a percentage of what is available on the timeframe in which you trade. This method allows you to evaluate the efficiency of your trading. It allows you to strive for a greater percentage so that you are not stuck aiming for example 2 pts a day.
Two things.. Setting goals makes for miserable trading. How does the market know what your goals are?
Now the mechanics of each individual trade and the reasoning behind trade management....is completely different than money management. Get the terms straight Trade Management Money Management
I have a slightly different approach. I think in term of ticks. Set the barrier of success low enough so that it can be achieved on a daily basis. Even on those days, when you feel like shit, you should be able to hit that goal. For the ER, I set my goal to 10 ticks. Everyone should have a goal but they should have the discipline to be patient and forgo a day or two of trading if there are no setups.
Sound point, but why talk about "Trade Management" and not "Trading Strategy"? Money management is for people WITHOUT a (working) strategy, i.e. for losers.
This I agree with. I do not find a valid use for popular "money management martingale type" strategies, other than to rank several trade set-ups and allocate funds according to the rank, which these do not teach. Optimal F, Kelly Ratio, FRM....etc...do not work. But again, if you have several set-ups within your strategy, one can rank the probabilities and bet more with the higher set-up. find an edge first... Michael B
I think you should change your target to at least 2 points a day or at least 40 points a month. Goals can be restrictive too.
I'm an equity trader myself, but I totally agree with spike500 here. My personal goal is 5% return on my account per month, and sometimes I crush that target, sometimes I go negative. As long as the general trend of your equity curve is sloping the right way (up!), you're not a failure and can concentrate on improving. I always try to measure myself up against what the markets offer - I can have negative days where I'm still quite happy with my performance, because my methods sometimes produces losses and I did "the right thing". It's not every day that everything moves like it should, and you shouldn't beat yourself up over that.