Traders Ask: Do You Ever Shut It Down for the Day After You Hit a Profit Target?

Hello Mike!I have a question about when to stop trading during day trading session and go home.You’ve traded many years. Can you say what is better in your opinion and what you prefer to do in your own day trading?Setting a goal to make max $500 each day and when achieve it, switch off the monitor and go home immediately It’s limiting potential profit which you can made each day, but can save money from losses.

Or trade untill the market close and untill opportunities exists, because sometimes there are very volatile and trending day. It’s not limiting your potential profit, but you can go red after profit trades early morning.

Bella Responds

After you’ve had a strong open consider developing a give back rule. On our desk we recommend 25-30 percent for our traders. This is a common practice at hedge funds. They lock it in after a predetermined gain.

I do see too many traders giving back too much after a strong open. We have had to convince some traders to set a give back rule. They were giving back way too much of their profits and this was infecting their monthly results. A simple addition of a give back rule allowed them to keep much more of their P&L for the month.

When you are trading well you want to trade more One Good Trades. This is no different than a shooter in basketball who is hot. Get him as many good shots as you can. There are certain days when you see the screens better. There are trading sessions when the movement in the stock you are tracking is easier for you to determine than other days. We want to exploit these days as best we can. So we do not encourage you shutting it down for the day when you hit a predetermined number.

Also these days can show you new levels that you can reach. That $500 might not be your potential. It may be $1000 or $1500 when you first start. Keep making One Good Trade and then One Good Trade and then One Good Trade and find your best.

Mike Bellafiore

Author, One Good Trade