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i believe a daily profit target is one of the most important things you can have on your side as a day trader. to me it is almost as important as your technicals and everything else. like everything there must be a goal or a limit you are trying to reach. in life we set goals for ourselves, like where do you want to be 1 year 5 years and 10 years from now, without goals we are just living life with no purpose. same as trading in my opinion, without a goal you are just trading, we do not trade to trade we trade for skill. as a day trader we should have daily goals as well as yearly goals and so forth. the reason we set goals is to see where we are and try to improve from there, there is always room for improvement. when i first began trading i would just trade not having any goals set in mind, i would trade just to see how much i can make looking at my P/L trying to out do my last trade. but in reality i lost more then i actually gained because of over trading and revenge trading. daily goals and max losses go hand in hand. they are parameters or rules we should set within ourselves to keep us successful in day trading. greed is a motherfu#$@%. one thing is for sure the market will giveth and the market will taketh lol meaning if you can find yourself profitable keep your profits because at any moment if you are not smart with your profits the market will take them. its always best to keep what you got then you lose what you could've had. time of day to me is all on personality of the trader, personally i like the morning because its fast pace and more profits can be made. some might like mid day because the risk is not as high because of it being much slower. you have to find your comfort zone, tell yourself how much you would like to gain and what your max loss would be. the important thing is being realistic with your account size. many people like going in with large share sizes because the profits are bigger but same goes with your losses. practicing set it and forget it rule or mentality is essential for a day trader. set a goal of what i would like to gain in a day and how much you would like to lose in a day. set it and forget it, remember the goals do not have to be perfect just close enough.

As a new trader, it is a challenge to walk away once the goal is met, and I debated with myself what is the most effective way to learn the market, price behavior, and developing efficient and effective skills. I asked myself, should I be more liberal with my trades, even if this means over-trading? By doing this, I can learn price behavior, recognizing and taking entries through "reps" (the more I trade the more experienced I will be)? Athletes take this approach to fine tune their game. On the other hand, I asked myself, should I be more conservative with my trades, ending my day with a profit goal/loss, even if this means decreasing the exposure I have to the market? In the end I opted for the latter. I believe being more conservative mimics the behavior of trading in a live account, and reduces the likelihood that I will develop bad habits and inconsistencies. I played video games competitively throughout my life, playing in tournaments and leagues for money. I find that there are many similarities that day trading has with competitive gaming and sports. One thing I try to really avoid during competitions and day-trading is stat checking because the more I check my stats, the worse off I am. Mentally, I feel that when I lend my attention to my stats, my performance decreases because I take away attention from the game at hand. Even behaviors such as celebrating and complimenting myself early can impact my performance (conditioning). In the end, I minimize my account window and focus purely on trading as much as I can. As a researcher in psychology, I understand that there are many psychological theories that may explain this. Research has demonstrates the effects of mental load and fatigue, inattentional blindness on performance (Boksem et al., 2005; Hyman et al., 2010). As traders, we are required to process a significant amount information at once that will ultimately inform our decision. We constantly monitor price action, Level 2, historical evidence, indicators, emotions, etc. Processing this much information requires a significant mental load, which our brains can withstand so much of. After analyzing pre-market behavior and technicals, and taking our profits after analyzing opening action, we are mentally fatigued, despite our motivation to continue trading. Once fatigued by our initial trades, we stop perceiving things as clearly. Mix mental fatigue with high emotions (prolonged sympathetic activation), we might be easy to lose sight of details and misinterpret information, resulting in potential drops in performance. While I believe that trades are independent of each other, I don't think our perception and biases are independent. I believe there are carryover effects that leak from one trade to another. We bring our biases from one successful trade, and might apply it to another trade, for better or worse. For example, in one trade, we might have take a trade on a VWAP hold that proves successful. In the next trade, we might see similar VWAP hold pattern, take the trade, and lose. Maybe we didn't perceive the lack of volume in the second trade? Whatever it may be, we may have been highly influenced by the first trade, which may have distorted our perception in the trades, ignoring details that might indicate otherwise. In the end, while I believe that there is a correlation between # of trades and performance, I don't think there is a single factor that contributes to decreases in performance, but, rather, all factors collectively contribute to losses from overtrading. There are other things such as time-of-day, lack of volume, proportions of retail traders vs. institutional later in the day, etc, that may also have an effect. Maybe an internal study could be conducted on this. I'd be happy to volunteer

I think having a daily profit goal is incredibly important, not only for the obvious reasons of income to live on and invest further, but psychologically, it sets up a framework that minimizes risk and maximizes the chances of success. Assuming you have been successful at historically hitting your target profit, having one serves to set an attainable goal and ultimately, a daily "reward". Conversely, consider the concept of "more", in our little monkey/reptile brains, "more" acts like a short circuit that can lead to illogical and impulsive actions. More is almost always perceived as better, at least on the surface, but it has a vague and nebulous value, more is always more, when you get more, you want what? MORE OF IT ! In trading, this is a recipe for disaster as the amount of risk is infinite and entails almost no chance of success, this of course is what we traders seek to reduce, not enhance. I'm no psychologist so please pardon my rather primitive explanations below and also, the following is ONLY my opinion and personal perspective on the topic. We humans are reward vs threat based creatures who despite different ways of going about it, are simply looking to have our needs met with as little exposure to risk as possible. Setting a daily goal accomplishes this through first off, setting a benchmark at which (X) amount of daily profit meets whatever daily needs we require. You hit your goal, you get the dopamine reward, you've accomplished what you set out to do, life is good right? So why push it further which simply invites risk and loss? Not only that, how many solid trades can you find in a day? To some extent, its a numbers game with the opportunity limited by our capacity to find the good ones. Also, in our heads, taking a loss after meeting a goal can feel far more devastating than simply having a loss/random difficult day, while this pain/anxiety is good in the sense that it is how we learn what NOT to do, how many times do you need to go through this to learn that it was NOT the right path to take. Again, setting up a rule that says, when I hit (x) dollars for the day, I walk away, creates the framework in which this risk of highly minimized. Now, let's consider one possible scenario of what MIGHT go through the mind of a trader who does not set a daily goal. He starts the day with the concept of some nebulous dollar figure in his head that has no upper limit, it's something unattainable, he has no goal other than "MORE", what is more? More is always more and you always want more of it because it is scarce and hard to come by. It's a bit like the idea of doing something you need to do, but saying, you will do it tomorrow, tomorrow often never comes, just like more is never enough, more is always more, it ultimately becomes greed, carelessness, and drastically clouds sound judgement. Setting a profit goal allows us to attain a finite, acceptable, and definite value of what "more", is. I mean it is more than you started with right? I think most of us have noticed that, and I have for sure recognized, that the more you trade, the more chances there are of a loss, and possibly a big loss, and worst feeling of all? unnecessarily losing a previously attained "reward" , which is something we all strive to avoid, so why do it? Psychologically, we are always scanning the horizon for the thing that will meet our needs, we scan endless candlestick patterns, our scanners, etc. left unchecked, these "needs" become exaggerated, endless, and grow into expectations we will never meet, and hence, create disappointment and end in failure. So lets break this down into the base psychological components, (Reward): Rewards drive us to do the things we do, ((rewards being the serotonin, dopamine, oxytocin, etc. released in our brains when we do something positive towards our survival), these chemical responses are incredibly short lived, which drives us to continue to seek them and hence, repeat previously successful behavior in order to get yet another "reward/winning trade". Over time, we come to expect these rewards and along the way, we learn how to best attain them. Creating these behaviors takes time as the brain adjusts to it, positive change is always difficult, a bit painful, and never comes fast enough as it MUST be repeatable over time, however, it is a critical component to our survival/trading success, we need to do it over, and over again for it to become a learned and natural response that we can then do without expending much effort. Applied to day trading, setting a daily goal sets a baseline that at the fundamental level, accomplishes 2 things we all seek, meeting a need/reward/feeling good, that is repeatable as often as possible, and minimizing the threat/risk of loss. A daily profit target is a line in the sand that says "this is a goal I can hit daily with the maximum amount of success while still meeting some external financial need with the minimal amount of financial risk of loss". Basically, a profit target is an optimal balance of practical need, reward, effort, and risk aversion. The other side of the equation is (Threat, risk/anxiety/pain), the 2nd primary driver of our actions. Think back to a time when you ended a trading day with a large loss, think about how you felt then, and how it makes you feel now. Now do the same exercise and think back to a day when you had highly profitable trading day. Which experience do you recall with more intensity and emotion? If you are like most of us, the loss will trigger the stronger emotion as it has made a larger impact on your psyche and is more committed to memory. This makes sense because our ultimate goal is survival, and despite our technology, glitz, glamour, and advancement, our base brain, the limbic system (sort of like the little lizard part of our brain), is still driven by the same primary survival driven goals as our ancient ancestors, we subconsciously see a losing trade as a threat to our existence regardless of what your HUGE cerebral cortex says. In nature, rewards and acts of survival are continually necessary and short lived and while you may not reach every reward you seek, you usually still live to fight another day. Threats however, one is enough to mean that no, you don't live to fight another day. A trading loss has this same psychological effect on us which is why they are so much more intense than the short lived pleasure responses we get from meeting a small goal. Given you only survive so many threats, if at all, the memory of such events creates a more intense response. Now bringing this back to trading and applying the same concepts, this is why listening to your gut is so important and why a daily profit is such a critical tool to ultimate success. A single bad loss has the intensity of five nice profits. We humans are the only creatures that can make a single mistake yet relive it over, and over, and over again, sometimes for our entire lives. As traders, we need to accurately assess risk vs reward with a clear head, allowing anxiety to cloud our judgment through experiencing excess and repeated losses is entirely detrimental to our success, confidence, decision making, and emotional well being, etc. So again, setting a daily profit that maximizes the probability of maximum repeated success over time with minimized risk is more than just financial protection, it is psychological protection. It creates a psychological environment where we make the most of positive reinforcement all the while learning the most we can from a minimized number of risks and losses. Now granted, a set profit target will be fluid over time, not static, and will increase as our skills grow, which is truly the beauty of the way the mind/brain works and why I find understanding these concepts is beneficial to advancing the very complex skill of day trading. While this explanation may seem rather tedious, which it can be, I truly believe that understanding these primary drivers as they apply to not only trading, but life in general, gives us control over outcomes and truly puts us in the drivers seat of our actions, emotions, and ultimate success. Now, aside from the goal of making money, which is why we do this to large extent, setting an attainable daily profit provides value beyond the simple matter of providing income to meet our need for resources. For me personally, the way my trading day ends sets the tone for the rest of the day for either good, or bad. For those of us on the West coast at least, day trading is the first thing we do on a weekday. When I have profitable mornings, I'm left with a feeling of accomplishment and financial security that colors how I perceive the rest of the day and in the best way possible. More than that, when the next trading day starts, I recall the previous days success, I start the morning trading with confidence, optimism, and a positive outlook, I'm better able to pick out good trades and execute them efficiently, success breeds more of the same, its a vicious cycle of achievement we all strive for. Now, When I end the morning with a loss, its very easy to brood about it, ending with a loss sets a far less desirable tone for the day. Even more detrimental is that the next trading day can also be colored by the previous days loss. I may start the day with a feeling of anxiety, fear, and apprehension, which ultimately clouds my judgement and successful trading becomes inhibited, something no trader wants. So to put some perspective on this, on days that that started with hitting my profit goal, im not thinking for the remainder of the day, ""oh I COULD of made $750 instead of my daily $500 goal"", I'm thinking ""hey, I had a profitable trading day, and that's enough"". There will always be money left on the table to some extent and as psychologically healthy traders, we need to be ok with that and as Andrew always says, DONT CHASE IT Ultimately, we are all seeking happiness, if setting and reaching a reasonable daily profit goal can provide this on a near daily basis, why would you NOT do it. Bottom line is this, money is simply a means to an end, there is never "enough" of it, even many Billionaires continually seek more of it yet, are they really any happier than the man who sets realistic expectations, has his basic needs met and experiences many small rewards over the course of the day vs. the billionaire who continually has to seek ever larger and even harder to attain rewards for the same chemical reward response in his brain? I believe the former has the more desirable life. Almost no one is going to make so much money in a short period of trading that you can take the rest of your life off, so why NOT set a daily profit goal and then go on to enjoy rest of your day with a sense of accomplishment and well being vs. not having a set goal and chasing that ever elusive and never ending psychological rabbit hole of "more"? As traders, we have a huge number of tools in our arsenals to achieve success and I believe a profit target is a critical factor in the pursuit of that goal. Andrew, I hope this helps you, Scot