The “Day Done” concept comes from an attempt to reach a daily goal and stop trading; some traders use day done with losses and some use a day done with profit (or both). For example - a common “day done goal” is to reach $50.00 profit or lose $25.00 and stop trading.

I do not propose that traders use a day done goal - unless there is a purpose to having that goal. For example - is there a reason you are going to stop trading at a specific dollar value? Typically - I have proposed the Day Done concept to traders who were having problems in their trading day.

The Day Done - to me - is much like a tool. If I don’t need to open a can (for example) then I don’t need a can opener right now. If you are not having issues with your trading then why use a day done rule?

Life

I can say - that spending all day trading is not ideal… when we look at what else we could be doing (spending time with family and friends, going out to exciting places, generally living life) so from that point of view - sure. No reason to spend all day swinging the bat (so to speak).

But - before you begin a trip down the road of restrictions I think we should have a look at some situations where Day Done could be useful.

Over Trading

Over trading is a dangerous thing and has been considered one of the leading causes of failure for new traders. How much trading is "too much?" Or - at what point should a trader shut down to prevent "over trading?"

This is not as simple as it first seems. One thing to consider is that a trader may not need a day done goal at all. A lot of new traders are still working a "day job" and do not have the free time to trade all day.

Other traders may not be overly excited to trade or are holding back - scared to really engage with the markets and are not "over trading."

If a trader is not having issues with "giving back profits" by continuing to trade after getting a few solid wins during the trading day then they really do not have a need to "limit" their trading.

Loss

How many losses should a trader take before they stop trading today? Should we set that in “the number of trades per day” or set that in “specific dollar values?” This - like a lot of things in trading - should be left up to the individual trader. Let your trading history be a guide.

Do you take losses early but gain them back through the day? Do you make profits early and give them back through the day? When you are taking a loss - was it because you continued to trade - was it because of the trade approach you used - were you just completely wrong in the direction you traded?

If you are getting tired and are making mistakes because you have been trading for a while and the mistakes are showing up - then it would seem like you have over-traded and need a break.

If you are on paper - then it should not matter how many times you lost or how much paper money you have lost; try again! Getting exposure to the markets is one of the reasons for using a paper account - so setting limits on that use because of performance does not make sense to me.

Account Goals

Account goals are another reason to use a "Day Done" target but this is generally a concept that "profitable traders" are focused on. Once a trader has become consistently profitable in trading it is advisable to begin working towards goals such as

• account growth

• increasing a savings / retirement account

• opening a new account

• paying bills

Day Done - is dangerous

Day Done Profit Targets by new traders … are typically Unreal Expectations. Unreal expectations can cause more problems to traders than anything else. Each trading day we have to evaluate the market and the conditions of the market to determine if today is tradable at all.

If we feel obligated to trade - obligated to achieve some daily goal - this can actually encourage traders to develop bad habits and trade when the market is "unfit" for trading. Historically - there are days and "times in the day" when newer traders should not engage with the market and should sit out.

This includes "low liquidity" situations like before a premarket economic announcement, a short trading week, a short trading day, or an afternoon economic announcement like FOMC.

I have seen new traders come in with a goal like “I want to make 75.00$ a day trading the micro” and then trade in the worst part of the day to attempt getting that goal met. Having a daily profit goal - without a consideration for the type of day we could get today - is unrealistic.

Easy Stuff

One thing we promote here at the OEC is "doing the easy stuff" if you are not yet successfully trading. Avoid doing the "hard stuff" until you've acquired the skills.

Some "hard stuff" includes

• trading a tight range day

• trading the RTH open

• trading the lunch range

• trading in "power hour" (between 3 & 4pm)

• trading an event

Events

There are well documented events that are known to be difficult. Avoiding these as a new trader just eliminates the risk and the difficulty. There are a number of links below offering an introduction to market events.

• FOMC Week

• FOMC Day

• NFP / CPI / PPI

• Short Weeks (holiday)

• Short Days (holiday)

Can be Traded

When considering the trading day - if the market is open then it is "tradable" but the focus here is to avoid trading when the conditions are difficult.

Learn to recognize different types of trading days and then focus on trading the type of day that offers better trading opportunities.

When

With specific setups - the day can be done once you identify the lack of possible opportunity left on the trading day. On some days - you'll realize that there is not likely going to be a tradable setup early in the day & can stop before the day even starts.

I know - no one is learning to trade - just to sit out & not trade! But - there is a reason that professional traders do not just sit & hit the markets over & over - all day long.

As you work with Signet - you'll begin to recognize the type of days that have what you are looking for & you'll also begin to recognize the types of days that do not have what you are looking for.

On "those days" where there is unlikely to be anything for you - take care of things that have piled up on the "honey do" list or look at alternative markets or run trading drills. There is always something to do.

But when it's "one of those days" where you are not really expecting good setups - one thing you don't want to do - is get FOMO, get bored, or get impatient.

So - a "realistic" day done is once you realize there is nothing else coming today. I've seen the discussion about having daily trading goals but too little restricts you on good days and too much puts pressure on you to keep going.