Do you expect to make predictable profits when you trade, or do you expect to make equal income from each trading period?
Traders set themselves up for failure when they 1) expect to make predictable profits from each trade, 2) expect to make equal income from each trading period, or 3) put pre-defined limits on the gains they will take out of each trade.
Moreover, one of the worst approaches to the market a trader can come up with is something like: “I have to make $500 in profits today to make my car payment.”
To maximize profits, we must not place expectations on a single trade, or even on a group of trades. The market’s trend and volatility ebb and flow, and these are the main dynamics of the market. Add to the market’s pattern . . . your pattern . . . your mindset, your knowledge, your discipline and your expertise. Those are the factors that decide your profits.
Far too many traders develop trading plans that are supposed to earn a fixed amount of money on a predictable basis. Then they are disappointed, because it simply doesn’t work that way.
As well, the old 80/20 rule applies to trading as well as many other life events. For most trading systems, 80% of the profits are made on 20% of the trades.
Please don’t label… or predict your profits or try to assign expected profits to a time slot. Your goal is to become a consistently winning trader over time. Your goal is to earn more than you lose. The more proficient you become at choosing promising stocks and ETFs, and the more you stay on the right side of the market, the more successful trades you will make, and the more money you will take home!