Why You Should Avoid Setting Weekly Profit Targets ?

A lot of forex traders switch their computer on at the start of the week and have a weekly profit target in mind that they want to hit for the coming week. However this is not necessarily the best strategy you can adopt, and it can in fact be quite dangerous.

The major problem you have when you set weekly profit targets is that it can have a negative impact on your overall trading strategy, and it can alter the way you trade the markets. Let me give you an example of such a scenario.

If, for instance, you set yourself a profit target of $500 per week, then you may sometimes find that you have only made $100 or $150 in the first three days of the week. So on Thursday and Friday it can be very tempting to try and hit your $500 target by taking slightly riskier positions that are not based on your existing trading system, or up your stakes in order to try and bank a bigger profit to make up the shortfall.

Either way, this is a dangerous road to go down because a trade is more likely to fail, and if it does you may find that you end the week close to break-even or in the red in some cases. So this is one example of how setting targets can have an adverse effect on your trading.

You may also find that your discipline goes out of the window as well when attempting to hit weekly profit targets. For example instead of employing your usual stop loss, you may decide to hold on to a position in the vain hope that it will reverse in the opposite direction and come good. Similarly if a position moves in your favour, you may abandon your usual price target and let it run for a lot longer in the hope that you can close out for a big profit and hit your target for the week.

So the message I want to get across in this article is that setting profit targets every week is not generally a good idea. You are much better off creating a trading system that gives you slow and steady profits, and sticking to this system all of the time. The fact is that not every week will be profitable, and you certainly cannot guarantee that you will make the same kind of profits every single week, so setting yourself profit targets is often a waste of time.