only one way to find out...
Well, this post brought back a few memories from when I started in the forex forest (and still finding my way in it). But it was something that I had thought about initially, but then lost track of it, as most newbies do, trying to hit a homerun with nearly every trade. But, 10 pips per day for a pair that moves over 100 pips per day, even 5 pips ( ie < 5% of ATR), how hard can that be. It is actually just as hard as making 100 pips. Logic - with a target of 5-10 pips, ur entries have to be close to spot on. With a target of 100 pips, your entries have a bit of room for movement.
But this thread has ignited some electrical impluses in my brain to make me take on the experiment, $500 total risk capital, target is 5-10 pips per day. After 2 yrs, I have finally managed to come up with some strategies that are able to pick the right direction to enter the trade (though always looking for better strategies). I know, that most of my trades will have the capacity to go greater than 10 pips, but that is my daily aim. Given the right environment, there is only one thing that can make this thing fail - lack of DISCIPLINE. lol, already learnt that since I started this on Friday. But still on track...
Now, before anyone starts saying the usual stuff about how this can not work, and coming up with all the reasons (logically and mathematically) that it is not workable, I say this - the drinks are on me when I make my first
A little about me, so you know I am not staring at the charts for 16 hours a day to make my 10 pips. I work a day job, usually between 9 to 12 hours a day, 6 days a week, am not able to trade the asian session, the london open, or sometimes even the us open. If it isn't my wife breathing down my neck to spend some quality time with family, I am chasing my little 14 month old (or vice versa ). Hence, my timeframe for trading is very limited, but my discipline is rock solid ( learnt the hard way, losing a few sub-accounts).
I may update my posts from time to time (don't want to make it over, as I am not the originator of this thread).
One of my favourites - "WHETHER YOU THINK YOU CAN, OR YOU THINK YOU CAN'T, YOU ARE ALWAYS RIGHT" - Henry Ford.
See you all at the drinks party...
Please post your results here or start your own thread. I have a philosophy that chasing 100+ pips per day is too exhaulsting but you can make as much money with the right MM with 20 pips per day. 20 pips a day is very easy using the River trade that Powertrader has introduced here.
The disusson here on maxing out the # of lots, etc. is sillly. 50 lots at 100 pips per month = ~600K / year. No need to compound further than that IMO. And when you have the kind of $ coming in you'll want to diversify anyway.
My personal plan is to get my FX account to where they can generate 25K or so a month ... pull out all beyond that to invest in real estate, longer term stock strategies, etc.
FX is a great engine ... but not the only one.
Well, I have come across enough traders who rake in more than 100 pips per day to know that it is achievable. Unfortunately, I don't think I am there yet. And to think that 20 pips per day is easy, believe me, it is not. I started my experiment on Monday, and looking at the screen waiting for the right time, within the confines of my time is very very tiring. My dose of coffee cups per day at work has almost doubled. But getting 20 pips with the river is achievable, I have noticed that.
Totally agree that fx is an engine. Once you reach a certain $/pip value in ur trades, avoiding emotional involvement would mean evolving to a much higher level as a trader. At the moment, I am sticking to 1 min per $500. ie $1/pip. Not sure how I would be feeling watching my trade go -5pips, if my 1pip=$100. Am looking forward to finding out though.
PS. I might start my own thread, could someone pls tell me which area it would be the most suitable. And just to update abt my 3 days of trading, I am -15 pips, but the breakdown is -30 pips due to operator (yours truly) error - lack of discipline, +15 due to system success. Loss of potential pips = +35, due to falling asleep at the desk at 1am.LOL. Have been given my first warning by my wife - sacrificing quality time for negative pips is not acceptable.
I apologise for going off topic from the originator of the thread.
I do plan to start using this strategy somewhere in the 1st quarter of next year. As for the time frame of 5 years, this isn't limited to a time frame, coz the month you don't reach your target of have a loss, you have go to back to scratch. It's like a snakes and ladder's game, the only diff is that when you are bitten, you go back to the start line and start all over again. Maybe it would be impossible to reach the 60th month, but if you follow this strategy, you can be sure that your account will not be wiped out by over trading (most newbies lose their account in less than 3 months)
Since, using this strategy, you can lose a max of 200$ (40% of your starting balance), it's safer than just diving in blindly.
I know many people aren't satisfied by this strategy, but my main aim isn't to post it here and prove that I'm the next Einstien, but instead it's main aim is to help people realise the importance of using a trading plan and the importance of building a base and to avoid over trading your account.
Even thou I've recd. much critism for this strategy, I will yet continue to insist that it is safer to use this strategy than no strategy at all. Afterall, this forum was started to help people, and I'm just trying to play my part.
I'm here to tell you that this is workable. I don't believe it's possible with an EA which means that you might have to be up at 3am every night for the next 5 years but that's getting off topic.
Strategy and advice start here... It's going to be detailed.. leave out details.. you might as well leave out your profits. If something doesn't make sense, keep reading, you'll see the picture as it's being painted so to speak. I don't know everything, but I know enough to save people time and headaches, the kind that usually make you give up.
You have to begin by calculating daily range averages for whatever pair you're trading. Too long of an average and you can't respond to the shorter term unpredictability of the market. Too short and your figures will be off, and you'll be creating your own surprises. A month ..give..or take seems to be enough, but to keep your averages accurate, they would have to be rolling correct?
Now you know what the pair does. I said that to say this- now you can choose your target. 5 pips may be a little over leveraged, not to mention the starting account size of $500 too small. I wouldn't do this with less than a few thousand dollars in your account, and I would trade that like you're starting out with the minimum account size. That way you can handle negative trades when they are at their most lethal..in the beginning.
What you want to do when leveraging like this is pick the ideal. We can start to do this by looking at our averages. For illustration, we've all seen trades that have this nice breakout and go for 40 to 50 to 120 pips. But there's 3 problems.. entry, greed, and exit. If you cut
those moves into three even sections, beginning, middle, and end. Which piece do you want? See the broad picture getting a little more narrow? The middle obviously. You want in after there is a strong enough move to keep you going (your leveraged heavily, stopping short is bad), and you also want to be out before the top when the market is known to bounce shimmy and shake. This is the second thing that decides your pip target.
The third thing that determines your pip target has to do with your money management and your goals. Account size X daily interest desired = the lots to trade based off of how many pips are in your target. Is my math right? dunno, but my thinking is. Example: $10,000 account.. you want to make 20% a month, so 1 % per trading day (don't get greedy if you questioned that, you'll also have to question if this style will work for you.. compound 20% a month on 10,000.. you'll like it. take a penny doubling everyday or $100 right now?). So.. 1% per trading day. It would be smart to risk only .5% per trade. So if we're going for 5 pips that would leave a 2.5 stop. Not likely going to happen. Increase your Target to 10, now it's 5, 20 now it's 10. Now it's looking a little more realistic. You can adjust this all based on your risk tolerance. But don't confuse greed as being more tolerant to risk.
So if you're looking at a reachable target of 20 pips, that means you're looking for moves and pairs you can fit that into. You won't always get them, but you have to work it where the probability is in your favor and where you're protected enough when you're wrong. Based off of 20 pips and $100 as your goal for the first trade, that means you're trying to make $5 a pip, so adjust your lots accordingly.
In my experience there's only a couple of ways (that I've found so far) to do this...You have to come up with a razor sharp entry system. Which means doing lots of homework on lower time frames. But you have to confirm yourself with a higher time frame. This can get stupid fast though because there's always a higher time frame. If you go too high, your not very razor sharp. The second thing that I can't seem to find a way out of, is scaling your position. Yes, even when going for so little. In my experience, you can enter lightening quick sometimes and watch your position shoot for a quick 8 pips then turn around.. now what? We're only dealing in a window of 20 pips. So based off of a razor sharp trend jumping system... Go in with 1.0 instead of .5 lots.. and maybe cash 1/2 out at 10 and 1/2 out at 20. We only need 10-20 pips at the original lot size by the end of the day right? And being safe as we do it? Is there a better way to ensure that you get something while still covering your backside on the trades that don't work out? And if we only make a 5pip trade, I'm pretty sure that's probably only one of 3-5 potentials for that day. Once again, we only need 10-20 pips a day right? This way if it goes 10 pips, it's still a wide enough window to tighten your stops. As long as say..only 1 in 10 trades goes neg right away, you're still fine. The trades that didn't shoot far enough before reversing will cover these. It gets even better if you can find a way to let a percentage flow even higher for those bigger days, becuase you also need a way to compensate for the 'range days' where you might not get your 20 pip window.. everything needs balanced. The only way to shoot yourself in the foot is to not find all of the 'forseeable' variables you can that need balancing. If in the end, everything is balanced, then your system works.
All of this can be fine tuned according to the behavior of whatever good system you end up finding to use.
The exponential math will always be the same, always there to make us try and work smarter for our pips, not harder. I'm writing this to save people headaches. Don't bother bashing anything I've said, because it doesn't matter. I'm not trying to give you every 'what if' so if you have problems with the details, maybe we can talk about it. This is a general picture I've painted..compelled to help... remember that I said that.
I do believe however that it would be a good idea to keep this going, I'm only one person, and there are a lot of people here, many with some good ideas. Since money management is so important, why don't we start there, based off what we "can" do in the market.
VERY IMPORTANT NOTE: The following is just a theory. In reality, it might be extremely difficult, if not impossible, to execute it in live trading without the enemies of trading getting involved, i.e. Greed, Fear and Hope. But nevertheless, it is possible.
I've been around in this forum for quite some time. And I see most people trying to make a system tht should generate 1000 pips or 2000 pips per month, and try to enter every possible move. But the fact is, if you want to make $18m in 5 years, all you need is discipline and 100 pips per month. Don't believe me? Read on....
Assuming that there are 20 trading days a month, 100 pips would be an average of 5 pips per day. The choice of the system is your's. It doesnt matter if you do day trading or positional, if you do 1 trade or 100 trades, all you need is a system that can consistently make 100 pips for you every month.
1) You need a system that can make 100 pips consistently every month per lot.
2) Opening balance would be $500
3) Trade is done only in mini lots
4) 0.1 lot is allowed for every $500 balance. So if you have $1000 you can trade 0.2 lots and if you have $5000 you can trade 1.0 lots and so on.
5) Emotions like Greed, fear and Hope have to be barred out.
6) Once you make 100 pips in a particular month, you are not allowed to trade till the month is over. So even if you make 100 pips in 2 days, you cannot trade for the entire month then.
After 12 months you will have $3,100
After 24 months you will have $26,000
After 36 months you will have $230,100
After 48 months you will have $2,050,300
After 60 months you will have $18,278,700
So maybe you'd say no system can make 100 pips consistenly per month. OK, let's say if you were right. Would you agree with me that it's comparatively easier to make 10 pips per month? Even if you target 10 pips per month, you would yet end up with $1.8m in 5 years using the same methodology.
I remember Igor saying this in one of his TSR audio tutorials, trading is like painting a canvas, you should step back and try to look at the bigger picture than a trade or a single day alone. It is so true.
So get rid of your greed and trade with nothing but common sense. Plz see the attachment for the break up of gains per month.
Some fine search on this forum can bring good results . Very interesting thread, is anyone trying this already.?
It would take some Godzilla balls to compound it like that when your account goes over a personal threshold.
Yeah it could be hard but i like the idea 100 pips per month with such discipline.
Like these Rules though:
wow this is simple and achievable. thanks alot. I've been making consistent 30pips per day since I started trading live 4 months ago. W/ discipline and stick to the plan, it is duable. This strategy just add a new light bulb into my tool box. Thanks!!!!
usually i dont respond to this type of noob questions
but im gonna make it realy simple for you and other false dreamers.
no. its not possible to make that kind of gain.
but u should try it anyway so u know for yourself first hand.