20 pips, a possible money management system..

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shakespeare515
33
shakespeare515  

One of the most valuable things that an online forex trading course can show you is how valuable 20 pips a day is..

1 standard lot at 20 pips/day = $200/day = $50k/year

2 standard lots 20 pips/day = $400/day =$100k/year

3 standard lots 20 pips/day = $600/day = $150k/year

5 standard lots 20 pips/day = $1000/day =$250k/year

10 standard lots 20 pips/day = $2000/day = $500k/year

If you were obeying 2% risk management, then you can multiply your account about 5 times a year.. at 4% risk management, you can multiply your account roughly 10 times /year. To demonstrate..

If you have a $10k trading account and you are trading at a 2% risk, then you can risk $200 per trade (2% of 10k = 200). that means you can trade 1 lot with a 20 pip stop and 20 pip target (1:1 risk reward, least acceptable).

If you can make 20 pips/day on avg with that 1 lot you will make 200/day=1000/wk=50k/year..

So, you just made a $50k/year income with just a $10k account!! only risking 2%. Most traders dont appreciate the leverage we get, and risk way too much, only blowing their accounts before they know what went wrong!

At a less conservative 4% risk management level, you could risk $400 per $10k. Using the same 20 pip model, we would trade 2 lots with 20 pip stop and target. 20 pips/day would now equal $400/day=$2000/week=$100k/year. So, a $100k income was achieved with a $10k account, using the same 20 pips/day strategy.

What's important is that we never need to try for more pips/day, thats too difficult and novice forex traders have a hard time realizing this. It is more beneficial to be consistent at a small number of daily pips and then gradually increase your lot size as your account grows.

btw, this is NOT compounding, this is taking your profits out every week. If you were to leave the money in your account and increase your lot size according to your account balance you would see astronomical gains.

thoughts?

mikhail
83
mikhail  

the main thing which is not correct is that you don't consider lossy trades.

after a loss you need to increase the risk for the next order to get profit and this leads you to martingale system which will kill your account soon.

ucantrust
3
ucantrust  

I doubt it

It was horrible, it will become the world's richest people!

shakespeare515
33
shakespeare515  

20 pips per day...

landofcash:
the main thing which is not correct is that you don't consider lossy trades. after a loss you need to increase the risk for the next order to get profit and this leads you to martingale system which will kill your account soon.

No, you never need to use a martingale strategy, that is gambling..

You do not need to add to your risk after a losing trade.. just become consistent at a certain pip total, using whatever strategy can get it for you..

I am not saying you need 100% accurate trades.. just netting around 20pips per session.. or whatever your system can get you conistently.. I have losing trades as well. But I have a system that is very accurate at predicting bounces.. many go for twenty, some go for 8-10. I take about 3-5 trades/ session, ending up 20 about 4 out of 5 trading days.. some days netting 30+ (my losing days are not always -20 either, that is the max I will lose before closing up shop for the day..)

The idea is practice on demo a workable forex trading strategy, and whatever you are finding is a pip level you can be reasonably consistent at, (10, 15, or even 30 pips) then weight that to about 2% of capital. If you can get 30, you can use a daily 15 pip stop trading, so you can have one winning day take out two losing days. There are many ways to approch this style of MM, what is important is to truly know the value of consistent small pip gains over time.

Once you are consistent at your level for a couple of weeks, start trading 1 mini with same system, once the "shock" of using real money subsides and you start feeling comfortable at your new risk level, you can move up to 2 minis after a few weeks of consistency. (as long as 2 minis does not violate your 2% (or 4%, to each his own) risk level. And move up the ladder, doing nothing more than making 20 pips per day... this is scalable

This strategy obv works best with a scalper mentality. and remeber you do not have to have 100% winning trades.. If you are using 10-15 pip stops and 20 pip targets, you will still have positive risk:reward.

Even if you dont average exactly 20 per day anything close would still achieve amazing account growth..

...good trades,

Sam

ndsouz1
758
ndsouz1  

Nice IDea. Glad to see someone who shares the same insight with regards to money management.

Personally being a 5year trader, im doin the same thing as u, except im aiming 250pips a week about 50 a day. with 40% of my account.

So i can predict getting a 800% gain per month.

This NFP week itself i averaged 325% in one week.

But it depends from trader to trader. thier risk appetite. thier strategy etc...

Bourntec
59
Bourntec  

Hi shakespeare515,

so what do you do when you have a loss, or a loosing streak? Do you still keep your lotsize unchanged?

Do you have a RAS ID? Would be interesting to follow your progress.

Sergey Golubev
Moderator
109865
Sergey Golubev  

There is similar system here:

https://www.mql5.com/en/forum/174805/page2

finally
51
finally  
shakespeare515:
One of the most valuable things that an online forex trading course can show you is how valuable 20 pips a day is..

1 standard lot at 20 pips/day = $200/day = $50k/year

2 standard lots 20 pips/day = $400/day =$100k/year

3 standard lots 20 pips/day = $600/day = $150k/year

5 standard lots 20 pips/day = $1000/day =$250k/year

10 standard lots 20 pips/day = $2000/day = $500k/year

If you were obeying 2% risk management, then you can multiply your account about 5 times a year.. at 4% risk management, you can multiply your account roughly 10 times /year. To demonstrate..

If you have a $10k trading account and you are trading at a 2% risk, then you can risk $200 per trade (2% of 10k = 200). that means you can trade 1 lot with a 20 pip stop and 20 pip target (1:1 risk reward, least acceptable).

If you can make 20 pips/day on avg with that 1 lot you will make 200/day=1000/wk=50k/year..

So, you just made a $50k/year income with just a $10k account!! only risking 2%. Most traders dont appreciate the leverage we get, and risk way too much, only blowing their accounts before they know what went wrong!

At a less conservative 4% risk management level, you could risk $400 per $10k. Using the same 20 pip model, we would trade 2 lots with 20 pip stop and target. 20 pips/day would now equal $400/day=$2000/week=$100k/year. So, a $100k income was achieved with a $10k account, using the same 20 pips/day strategy.

What's important is that we never need to try for more pips/day, thats too difficult and novice forex traders have a hard time realizing this. It is more beneficial to be consistent at a small number of daily pips and then gradually increase your lot size as your account grows.

btw, this is NOT compounding, this is taking your profits out every week. If you were to leave the money in your account and increase your lot size according to your account balance you would see astronomical gains.

thoughts?

Forget the pie in the sky ideas.

Just focus on finding a system with a win rate above70%.

Any ideas for such a system?

shakespeare515
33
shakespeare515  
finally:
Forget the pie in the sky ideas.

Just focus on finding a system with a win rate above70%.

Any ideas for such a system?

Yes try the Tiger Grids at Forex Malibu. It's solid. with live pro traders and moderators, live trade room, and expert advisor.

hope this helps.

shakespeare515
33
shakespeare515  
shakespeare515:
Yes try the Tiger Grids at Forex Malibu. It's solid. with live pro traders and moderators, live trade room, and expert advisor. hope this helps.

UPDATE: New Expert Advisor just released. It is compatible with the Power of 20 Pips a Day Money Management System that is mentioned in this thread.

Worth a loooksie!

Firdhaus
18
Firdhaus  

hmm...good MM i think..

12
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