Forex Trading - Why I Don't Like To Set Myself Daily Profit Targets
There are many forex day traders out there who do this for a living
, so they often need to set themselves daily price targets. However speaking from my own personal experience, I think this is generally a bad idea.The thing about the currency markets is that no two days are the same. For example there will be some days when there are lots of important economic data releases and the price of the major pairs fluctuates wildly, and there will be other days when there are no announcements and the markets trade in a very narrow range all day on low volumes.
So if you were trying to generate profits on each of these two days, you would probably get totally different results, regardless of what trading system you use. You cannot expect to get the same results trading totally different market conditions because this isn't realistic.
Therefore it is pretty pointless setting yourself daily profit targets that you have to achieve. If you do go ahead with this plan, then the end result is that you will probably force trades that aren't really there. In other words you may deviate from your usual trading method and open positions where not all of your trading criteria are met. You may even place impulsive trades that are based on nothing more than gut instinct.
The best approach to take, at least in my experience, is to take a more relaxed approach and concentrate on the long-term picture. Your only objective should be to grow your trading account month on month. You don't need to generate profits every single day because you can make just as much money from two or three good days every week, where there are lots of high probability set-ups and ideal market conditions.
You could even lengthen your time frame and concentrate on placing fewer trades that generate just as much profit. So for example you could look for two 100 point trades per week on the 4 hour chart instead of looking for four 10 point trades every single day on the 5 minute chart. The net result is still the same using this longer time frame, and it's a lot less stressful.
Anyway the point of the article is that it is a dangerous game to try and hit specified profit targets every day. If you're not careful this will have an adverse effect on your overall trading, and will ultimately be counter-productive. It is much better to open high probability positions when they arise. If there are no set-ups, then you should simply switch off your computer and come back the next day because there will always be lots of very good set-ups just around the corner.
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