Financial Considerations -Set Trading Goals and Limit Risk
Importance of setting limits. Define your goals and objectives for day to day operations.
When day trading the market, you must have a plan. How strict you are to adhering to your plan will have a major impact on the outcome of your trading. Below is an example of how to set daily financial limitations. Nexgen does not provide trading signals “as a service” nor offer personalized trading advice. Example trading plans, rules, examples, as well as any trades taken during class by the educator, as well as all written and or video documentation is for educational purposes only. All speculation, especially day trading with leveraged instruments, involves great risk as well as reward. Past performance is no guarantee of future profits. Please assess your financial situation carefully and only use risk capital.
FINANCIAL CONSIDERATIONS/ LIMITATIONS: DAILY GOAL: to make $300-600 per contract (P/C) daily. DAILY MAX LOSS: $400 - trailed from highest profit achieved intraday. If reached, then stop trading now! Spend time analyzing all trades with pictures for correctness and fill in your trade tracking spreadsheet.
  • Define the maximum loss per contract per trade. Most trades will use $120 to $150 maximum risk per trade. Entry locations strongly impact the risk and stop placement.
  • Define profit targets- i.e., $200 & $400 targets on very high probability trades or $100-$150 first target then break even on medium probability trades. SEE MANAGEMENT PAGE
  • Max loss per day. If $0 profit then down $400 p/c (per contract) - stop for the day.
  • If up to $200 profit then down $200 p/c stop for the day - notice it is a $400- trailing stop from highest equity per day. It is not ok to be up 200 and then lose $600.
    When up $300 per contract- use a $300 p/c trailing risk- ensuring a break-even day.
    When up $500 per contract- use a $200 p/c trailing risk- to lock in $300 profit.
    When up $600 or more profit, STOP FOR DAY or STOP after any loser or X %)
  • Fine-tune these examples to fit your own personal trading style and risk tolerance.
Make sure you have a well-defined objective for your trading. This is an example that will start small using Micro Futures contracts and work up to larger contracts. The key to making more money is consistency in your trading rules, execution, and management and then trading more contracts. *NOTE: when opting to trade micro futures, do your analysis on the "big" contract. Set up one tiny chart for executing the micro-futures. This will allow your analysis to be generated by those market participants with enough money to dictate the market.
Example trading objective Worksheet
Step 1. Your Trade Plan Objective - CME Group
Exchange created information on defining trading plan objectives
Step 3. Risk Management and Your Trade Plan - CME Group
exchange created content- no endorsement of Nexgen Software is implied- just good info
Last modified 1mo ago
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