Tag Archive for: Targets

It’s not about the money

For as long as I can remember, I’ve set myself a daily target. Make X a day. Hit the number, close the platform, get on with the rest of the day.

It felt sensible. A good number to aim for, something to measure each session against.

Lately, though, I’ve caught myself overtrading because of it.

Green, but not green enough

Here’s the pattern. I’m up on the day. A trade has played out and the P&L is green. But it’s short of the number.

So I take one more. Then, if that one doesn’t get me there, another. Each trade feels reasonable in the moment. But if I’m honest, the reason I’m taking it isn’t the chart. It’s the gap between where I am and where I said I’d be.

You can guess how it goes. A green day I could have banked turns into a smaller green day. Sometimes it turns into a red one. Sometimes it turns into drawdown.

The frustrating part is that none of this is news. Every trader has heard “don’t overtrade.” Knowing it and catching yourself doing it are not the same thing.

Every trader has heard “don’t overtrade.” Knowing it and catching yourself doing it are not the same thing.

Chasing a number, not a setup

Today a phrase popped into my head: it’s not about the money.

Something clicked. Maybe I’m not overtrading because the market is offering lots of setups. Maybe I’m overtrading because I’m chasing a number. Not a setup.

That’s a real difference. A setup is something the market shows you. It either meets your criteria or it doesn’t. A daily target is something you bring to the market. It has nothing to do with what price is doing. The market doesn’t know you’re short of your number, and it doesn’t care.

Once the number is in charge, the question you ask yourself changes. Instead of “does this meet my rules?” it becomes “can this get me the rest of the way?” Those two questions lead to very different trades.

What if there was no number?

So I’ve been sitting with a simple question. What if there was no number at all?

What if I took one trade, the one that properly meets my criteria, and accepted whatever it gave me? A win, a loss, a scratch. Done for the day.

It sounds almost too simple. That’s partly why it appeals. There’s nothing left to chase if the day is already finished.

A daily target is something you bring to the market. It has nothing to do with what price is doing

The obvious objection

One trade won’t add up to five or six green ones. That’s the first thing I thought, and it’s probably the first thing you thought too.

Fair. But I think that’s a sizing question, not a trade count question.

If I’m taking five or six trades to reach a daily figure, each one is sized small enough to allow for that many. Flip it around. Fewer trades, higher quality, larger size on the ones that meet my criteria. In theory, the same daily potential, with far fewer chances to give it back.

I want to be careful here, because “size up” is the kind of advice that gets people hurt. Bigger size means each loss lands harder too. This only works if a few things hold:

  • The criteria have to be strict. If “one quality trade” quietly becomes “one trade that looked okay,” it’s the same problem with more contracts.
  • The daily risk limit doesn’t move. Larger size on one trade has to fit inside the limit you already use, not replace it.
  • You have to be fine with a red day. One trade means some days end on a loss with nothing after it. That’s the deal.

None of this is proven yet. It’s a theory I’m about to test, not a result I’m reporting.

Making the plan the target

What changes most isn’t the maths. It’s what counts as a good day.

With a number, a good day is one where the P&L hits a figure. Without it, a good day is one where I executed the plan well. I waited for the setup. I took it at the right size. I managed it the way I said I would. Then I stopped.

That’s a target I can actually control. The market decides the P&L. I decide whether I followed my process.

It also fits how The Daily Trading Planner is meant to work. The planner is there to set your risk, trade limits and stop conditions before the session starts, while you’re calm. A trade limit of one is just a stricter version of the same idea.

If this sounds familiar

If you’ve got a daily target and you’ve ever turned a green day into a red one chasing it, try this before your next session. Go back through your journal and find the days you gave money back. Look at where the P&L was before the trade that started the slide.

Then ask yourself honestly. Was that trade taken because the setup was there, or because the number wasn’t?

You don’t need to scrap your target because I’m scrapping mine. But it’s worth knowing whether it’s working for you or against you.

Quality over quantity

So that’s where I’ve landed, for now. One trade (maybe 2). Proper criteria. Sized so the trades count. Accept what they give.

I don’t know yet how it’ll play out over a few weeks. I’ll log it and let the data show me.

It’s not about the money. It’s about doing the work well, and letting the money be whatever it turns out to be.

Should you take profit or let your trade run?

Should You Take 1R or Let It Run?

Most new traders focus almost entirely on entries. They refine confirmations, tweak structure rules, and optimise timing. But very quickly you realise something more important. Your exit strategy determines your expectancy.

Let’s walk through a clean example using simple numbers. No complicated formulas. Just clear logic.

We will assume the same core distribution throughout so every strategy is compared fairly.

The Starting Distribution

Across a large sample of trades:

  • 40% lose and hit full stop at -1R
  • 30% reach 1R but fail to extend further
  • 30% extend beyond 1R and can reach 1.5R

This is the raw behaviour of your system before deciding how to exit.

Now let’s compare four exit strategies using this same base data.

Strategy 1: Fixed 1R Take Profit

In this model you close the entire position at 1R. No partials. No trailing. No runners.

Using the base distribution:

  • 60% of trades reach at least 1R
  • 40% lose -1R

So expectancy is:

  • 60% × +1R = +0.60R
  • 40% × -1R = -0.40R

Total = +0.20R per trade

This is clean and efficient. Your edge here is accuracy. You monetise the fact that most trades reach 1R.

Strategy 2: 50% Partial at 1R, Runner to 1.5R

This is the classic hybrid approach.

When price hits 1R:

  • Close 50% for +0.5R
  • Move stop to break even

If the trade extends to 1.5R:

  • Remaining half earns +0.75R
  • Total win = +1.25R

If price reverses after 1R:

  • Remaining half stops at break even
  • Total win = +0.5R

Using our distribution:

  • 30% hit 1.5R → +1.25R
  • 30% stall after 1R → +0.5R
  • 40% lose → -1R

Now calculate:

  • 30% × 1.25R = +0.375R
  • 30% × 0.5R = +0.15R
  • 40% × -1R = -0.40R

Total = +0.125R per trade

Still profitable. But lower than the simple 1R model.

Why? Because only 30% of trades meaningfully extend. The runner frequency is not high enough to compensate for halving position size.

Strategy 3: Full Position Runner to 1.5R

Now we remove partials. The entire position aims for 1.5R.

If price reaches 1R but fails to continue, you move stop to break even and make nothing.

Distribution becomes:

  • 30% hit 1.5R → +1.5R
  • 30% reach 1R but reverse → 0R
  • 40% lose → -1R

Expectancy:

  • 30% × 1.5R = +0.45R
  • 30% × 0R = 0
  • 40% × -1R = -0.40R

Total = +0.05R per trade

You increased reward size but reduced realised wins. That trade off reduced expectancy.

Strategy 4: Structure Based Trailing

Now we remove the artificial 1.5R cap. Instead of targeting a fixed multiple, you trail behind structure and allow the market to decide.

To keep assumptions realistic, let’s use this distribution:

  • 40% lose → -1R
  • 30% reach 1R and then stop at break even → 0R
  • 20% trend moderately → +1.5R
  • 10% become strong runners → +2.5R

Now calculate:

  • 20% × 1.5R = +0.30R
  • 10% × 2.5R = +0.25R
  • 30% × 0R = 0
  • 40% × -1R = -0.40R

Total = +0.15R per trade

This improves on partials and fixed 1.5R runners, but still does not beat the simple 1R model under these conditions.

Comparing All Four

Using consistent assumptions:

  • Fixed 1R → +0.20R
  • Partials + 1.5R cap → +0.125R
  • Full 1.5R runner → +0.05R
  • Structure trailing → +0.15R

Under this distribution, the simplest strategy wins.

What This Teaches a New Trader

Risk reward ratio alone means nothing. A 1:1.5 target is not automatically superior to 1:1. What matters is how often price actually extends.

Your optimal exit depends on the behaviour of your market.

In rotational conditions:

  • Moves stall quickly
  • Pullbacks are deep
  • Extensions are limited

That profile favours harvesting 1R consistently.

In strong trending conditions:

  • Pullbacks are shallow
  • Structure stair steps cleanly
  • Large extensions are common

That profile favours structure based trailing and uncapped runners.

The mistake is using the same exit logic in both environments.

How to Decide With Data

Track one simple metric over your next 50 trades:

Maximum favourable excursion measured in R.

If most trades rarely exceed 1.5R before reversing, fixed 1R exits are likely optimal.

If a meaningful percentage regularly reach 2R or more, you may be capping your distribution too early.

The goal is not to maximise reward on a single trade. The goal is to optimise your overall distribution.

Sometimes the ordinary 1R is the most efficient solution.

Sometimes the market is offering a trend and you need to step aside and let it pay you.

The numbers will tell you which environment you are in.

The hardest skill in trading is knowing when you’re done for the day.

I used to think the hard part of trading was finding good entries.

It isn’t.

The hardest part is knowing when to stop.

Most of my worst trading days didn’t start badly. They started fine. A clean first trade. Sometimes even a small win. Enough to feel engaged, alert, involved.

And then that quiet thought appears.

There’s probably another one.

Sometimes the trigger is a loss. You feel sharp, focused, convinced you can get it back. Other times it’s a win. Confidence creeps in. You feel aligned with the market, like you’ve found the rhythm.

Both states are dangerous.

The market doesn’t know how your day is going. It doesn’t care if you’re up, down, or flat. Every trade is a new decision, but your state of mind carries forward whether you want it to or not.

What I eventually realised is this: stopping isn’t about discipline. It’s about self-awareness.

The real question isn’t whether another setup exists. It’s whether I’m still trading the plan, or trading the emotional residue of the last trade.

Some days I stop after one trade. Not because the day is “done,” but because I am. Focus softens. Patience shortens. I start justifying trades that look acceptable rather than obvious.

That shift is subtle. And once it happens, it rarely reverses.

I still have clear rules for entries. But I also have rules for exiting the day. Daily loss limits. Maximum number of trades. And one rule that’s harder to quantify but easier to feel.

My emotional tone.

If I feel rushed, reactive, or slightly irritated, I’m finished. Even if the chart still looks clean. Especially if it does.

That’s the uncomfortable truth most traders avoid. Overtrading usually doesn’t come from desperation alone. It comes after we’ve already had enough. Enough information. Enough opportunity. Enough exposure.

We just don’t want to admit it.

The best traders I know don’t trade more. They trade less. They treat mental capital as something that can be depleted, not ignored. Protecting it matters more than squeezing another trade out of the session.

Some of my most profitable weeks include days where I stopped before noon. No revenge trades. No boredom trades. No “just one more” because price happened to be moving.

Walking away early never feels productive. It feels unfinished. Like leaving something on the table.

But trading isn’t about finishing the day. It’s about returning tomorrow with clarity intact.

Knowing when you’re done for the day won’t show up on a chart. There’s no indicator for it. But it’s one of the few skills in trading that compounds quietly, day after day.

And once you learn it, everything else gets easier.