lets assume you have only 1 trade in 24 hours then that is maybe the way to go. but I think this prayer is somewhat misleading especially to beginners.
as an example, if you set yourself a 2% risk per trade and open 2 trades .. your risk becomes 4% .
but that's not the topic right now .. what I would like to get some input about Personal Stop loss and Take profits.
I do day-trade mainly.
I have a whiteboard next to my trading station where I write every evening before shutting down 3 numbers for each account:
in account currency: my goal for today - my Stop loss for today - my risk for today
I purposely NOT write the balance there !!
so what does this tell me:
- if the goal is reached .. thats a VERY good Ego Booster .. but besides that .. it has very little impact
I would also suggest beginners NOT to write a target on a board
because then you will start to trade your profits and not the trades ... that's a bad thing trust me !
- the risk value is just somethings for confidence ... it prepares you about how much you about to put on the line every time you place an order .. (i do not use the value to place an order .. as I do the exact calculation based on the equity) . but it helps to prepare yourself .. as if you see the order screen show a large number .. you know somethings is wrong .. and large/small is predefined by the number you wrote the day before ... so it kind of keeps you calm and gives you a simple Analog way of checking on what are you doing if emotions take over.
- if my stop loss (in account balance) is hit .. Stop trading .. do something else it can only go worse from there.
on the end of the day .. I edit the numbers to the current balances .
it does not matter if win or loose that day ... but on the next day, the numbers are there already .. as I wrote them the day before .
that sort stops you from making any idiot decisions or starts to convince yourself of some magical outcome for today based on some developed chart patterns or the amount of fairy dust you absorbed while sleeping.
what do you guys think of that ?
worked pretty good for me so far.