The Power of Day Trading with Weekly Profit Goals

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<h1>The Power of Day Trading with Weekly Profit Goals</h1><strong> Author: <a href='http://www.articleseen.com/profile_Markus Heitkoetter.aspx'>Markus Heitkoetter</a></strong><br /><p>I insist on the power of weekly profit goals in my Day Trading Coaching Program. I help my students determine a goal for each week that is at once attractive and realistic. I insist that sticking with this goal should be a hard and fast rule. So, no matter how confident, or lucky, they may feel, I tell students that the only way to guarantee long term success is to stop trading once they achieve their goal. They should wait until the next week to start trading again, even if they have a hunch that the market will stay in their favor. This is a difficult habit to maintain. The reason behind my advice is that consistent gains will always outperform your "hunches" over the long run. But, at first, almost every student finds it to be unintuitive. After all, they think, why should I stop trading when I am ahead? If I keep trading, won't I make more money? The answer is that, no, on average you will not make more money. In fact, by not sticking to a target goal each week, you drastically increase your chances of losing money, not simply diminishing your profits. A concrete example can show how this happens. I recently spoke with a trader who had made 138 trades in four weeks. Unfortunately, he had realized a total loss of $1,365 in that time. I looked over his logs, and I determined that he had one major problem: overtrading. This is how it happened. His first week started off well. He was up $1,166 after only five trades – not a bad profit for so little activity. However, by the end of the week, he had made an additional 10 trades in which he lost $672. That meant that his total profits for the week were only $494. The second week began worse than the first, but after a few successes, he was up $1,492. However, he kept trading even after scoring such a large profit, and, by the end of the week, he had given it all back. In fact, when all was said and done, he ended up behind by $248. The third week was at once the best and the worst. After only two trades, he was holding a profit of $2,170, which of course more than made up for his losses from the week before. But, because he kept trading, by the end of the week, he was down an additional $73.50. His fourth and, so far, final week, dealt him a serious blow. He was in the red for the entire week, and, although he had a couple of decent hits, he ended with a final loss of $1,537.50. I think you can see what happened. Except for the fourth week, this trader had profits exceeding $1000 at some point during each week. But by continuing to trade, he always ended up giving that money back to the market. If he had set a target goal of $1,000 for each week, he would have realized a total profit for the month of $1,462.50. Instead, he lost $1,365, a difference of $2,827.50. The power of weekly target goals is to make sure that you do not lose profits that you make through unnecessary risks. Remember that the best strategy is one that produces consistent profits. Certainly, this trader might have gotten lucky and won big from a single extra trade at the end of the week. But doing that would simply be gambling. Instead, if he had set a goal and stuck to it, he could have all but guaranteed himself a more modest profit each week which, in the end, adds up to quite a reasonable sum. Once new traders see that the reason behind weekly trading goals is to maintain profits, rather than limiting gains, they allow goals to become an integral part of a system that they put into action each week. And, at the end of the year, those weekly targets add up to a healthy profit. </p><strong>About the Author:</strong><br />Markus Heitkoetter is the author of the international bestseller "The Complete Guide To <a rel="nofollow" href="http://www.rockwelltrading.com">Day Trading</a>" and a professional day trading coach. For more free information on day trading visit his website <a rel="nofollow" href="http://www.rockwelltrading.com">http://www.rockwelltrading.com</a><p> Article Source: <a href='http://www.articleseen.com/Article_The-Power-of-Day-Trading-with-Weekly-Profit-Goals_2569.aspx'> http://www.articleseen.com/Article_The Power of Day Trading with Weekly Profit Goals_2569.aspx</a></p>

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Keywords : Day Trading,

Category : Business : Business