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Question:  I try to keep good money management on my trades and think I do a good job with it. I also have profit goals for the day and quit when I hit them. It seems that I miss a lot of winning trades after I do stop trading. Isn’t this that one good time to break my rule?

Answer:  There never is a time to break your rule; especially in this business. Doing such has led to many a failed venture even if from time to time it would have led to a profitable trade. It does however bring up a consideration to review the rules and filters in your plan if such lost opportunities are occurring quite frequently.

The best way to evaluate your current rule (which is a very good one by the way) is to backtest your strategy during the afternoon session or more specifically, after the average time you close shop after a successful day. The final analysis is simple; did your results prove more beneficial if you had not had that rule in your plan?

Another risk strategy to consider is to reduce your share size after you have reached your original daily profit target. This way you can participate in such opportunities and limit your giveback should those trades not work out. Lastly, consider tightening your filters towards the end of the day. Then you can still participate in the late day session after a profit but only select the setups with the highest success with all your filters supporting you. Always remember that risk management isn’t just about locking in profits, it’s optimizing the opportunities that the markets present to you.