Do you have a returns boost plan?
Consider what % of account do you risk/trade (what % of capital?) to make what % daily, weekly, monthly.
While I don’t preach daily goals, I do like weekly and monthly goals so you can gauge overall process performance.
Here is one of the techniques I use to boost gains
Say my goal is $5000 for the week, and I normally trade risk 500 to make 1500
if by end of day Thursday I am up by 8000, I will adjust my trade size.
1st rule – protect gains for week (put away 5000+50% of extra, so $6500) and I don’t need to trade for the day and be happy with 8k wins
2nd rule – if GREAT risk/reward comes, instead of risking 500 for 1500 gain, I can risk up to 1500 (excess profits) to make 4500.
If I win, account is up 6500+4500 = 11000 vs 5000 goal (double weekly goal)
If I lose, account is up 6500 vs 5000 goal (still met weekly goal plus extra)
If do nothing, account is up 8000, weekly goal met and decent extra
Taking this concept further, on monthly goal, each week, 50% of the extra goes into a great risk/reward pool for absolutely dumb not to take the trade plays. So say no trade on Friday, and same thing happens next week, and then on Tuesday of week 3 a play sets up. I can risk 1500+1500=3000 for 6000-9000 (2:1 or 3:1 ratios) gains
Play with the concept above and include multiple trades in a day and adjust accordingly.
Sometimes you are on fire, don’t let that momentum get away from you, but be smart about it (don’t risk all the gains from the grind toward your goals). Recognizing that market is moving well for your trade setups should be taken as an opportunity to boost your returns.
Boosting at opportune times can make the difference between your month being a standard gains month and one that can make 50 – 100% of the gains for the year.
For some folks, 20% of their trades may represent 80% of their profits. Think about that… So when firing in that 20% zone, take advantage (In my process I try to risk with profits vs core capital).
Best wishes… and if you try this technique, let me know how it goes for you. Reply to @spectre_trades on twitter
Don’t forget to checkout Black Box Stocks to help give you an edge in your trading.
Here is one strategy (not recommending it but providing one as starting point)
Assuming $5000 account
risk $50 to make $150. weekly goal on 500 (150*4 = 600 – 50 = 550) 4 wins 1 loss.
so if contract is $2 max risk is to $1.50 goal is to sell for $3.50+ ( we regularly find 100-300% gainers)
Say on Friday account is at 800 instead of 500. then same ideas as $8000 example but divide numbers by 10.THIS POST AND ALL CONTENT ON THIS SITE REPRESENTS OPINIONS ONLY AND PROVIDED FOR EDUCATIONAL PURPOSES ONLY. CONTENT SHOULD NOT BE CONSIDERED ADVICE OR A RECOMMENDATION TO BUY OR SELL A SECURITY. PLEASE SEEK ADVICE FROM AN INVESTMENT PROFESSIONAL.