A daily profit target is simply the amount of money that a day trader sets out to make for a single day. Professional day traders, at proprietary trading firms, often set a daily profit target and stop loss for themselves. Once the profit target or stop loss is hit, the SMART day traders, stop trading for the rest of the day.Day Trading Tip of the Day
Forget Your Daily Profit Target! Why? Setting a daily profit target can be quite intimidating for new proprietary day traders. Ultimately, leading to over-trading, chasing trades, and even worse, blowing up the account.
Rather than setting a "daily" target, give yourself an HOURLY target. For example, say you want to make $100 a day, and there are 6.5 trading hours in the trading day. Divide your daily target by the trading hours in a day, which will give you your hourly target. In this case, your hourly target will be roughly ~$15.
Using an hourly target, compared to a daily target, takes much of the stress away from trading. You won't try to make your entire day off one trade, putting your entire account at risk, and you will become a much more successful and DISCIPLINED day trader.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.