The Power Of Day Trading With Weekly Profit Targets

In my day trading coaching program, I advocate the power of weekly profit goals. I help my students set attractive and realistic goals each week. I would argue that adhering to this goal should be a hard-and-fast rule. No matter how confident or happy you are, I tell my students that the only way to guarantee long-term success is to stop trading once you reach your goals. Even if you think the market will remain favorable, you should wait until next week to resume trading. This habit is difficult to maintain. The reason for my advice is that, in the long run, stable profits will always exceed your "hunch." However, at first, almost all students find it unintuitive. After all, that's what they think. ``Why should I stop trading when I have an advantage?'' Wouldn't you make more money if you continued trading? The answer is no. On average, you won't earn more. If you don't meet your goals every week, you'll not only reduce your profits, but you'll also significantly increase your chances of incurring losses.

A concrete example will show how this happens. I recently spoke with a trader who made 138 trades in 4 weeks. Unfortunately, he lost a total of $1,365 during that time. I looked at his logs and saw that he was in big trouble. That means too many transactions. That's what happened.

His first week started well. He raised $1,166 in just five trades. Considering the lack of activity, the profits were not bad. However, by the end of the week, he had made 10 more trades and lost $672. That meant his total winnings for the week were just $494.

The second week started worse than the first, but after some success, it rose to $1,492. However, he continued to trade even after making such a large profit and returned the entire amount at the end of the week. As it turns out, he was actually $248 behind.

Week 3 was both the best and the worst. In just two trades, he made a profit of $2,170. Of course, this more than made up for the losses from the previous week. However, he continued trading, resulting in a further drop of $73.50 over the weekend.

The fourth time so far, last week, dealt him a serious blow. He was in the red all week, and although he took some good hits, he ultimately finished with a loss of $1,537.50. I think you know what happened. With the exception of week 4, this trader was making more than his $1,000 profit at some point every week. But by continuing to trade, he always ended up putting money back into the market. If he sets a weekly goal of $1,000, his total profit for the month will be $1,462.50. Instead, he lost his $1,365, a difference of $2,827.50.

The power of weekly goals is to ensure that you don't take unnecessary risks and lose your gains. Remember, the best strategies are those that produce consistent profits. Indeed, this trader would have gotten lucky and made a big profit with one additional trade over the weekend. However, doing so would be pure gambling. If he had set his goals and stuck to them, he would have been guaranteed a more modest profit each week and would have ended up reaching a fairly reasonable amount.

Once a new trader understands that the reason for weekly trading goals is to preserve profits rather than limit them, they can make goals an integral part of their weekly execution system. And at the end of the year, these weekly goals add up to a hefty profit.

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