Which is easier - a steady 500 pips a month or just 20?
As a matter of fact, I wanted to post this provocative question in a separate thread - based on the discussion in the neighbouring thread.
Beginner's intuition (often lame, but still not always) says that 20 is easier - and much easier. Especially if those 20 pips are achievable in a single trade.
The intuition of both a beginner and a seasoned pro tells me that 500 a month is not that easy.
My "theorist" intuition says that both are about equally difficult. But some worm still sits inside me and grinds me down: "Have you gone completely insane? Do you really think you can't achieve a decent, but stable, 20 pips per month (2% capital gain on a 0.1 lot position at $1K)?
If we set ourselves a goal of "20 pips a month achieved - quit trading this month and wait for next month", can we achieve anything here? Warren Buffet himself adheres to a similar strategy (do not enter more than three times a year)?
The 10% risk is quite high. Better more often, but less.
My intuition as a "theorist" tells me that both are about equally challenging.
Yeah, not easy - that's for sure. I think there was a similar discussion last year... )
20p is easy! You sit for a week or two, waiting for the True Trend to appear, and when it comes, you take them warm. The main thing is not to make a mistake, get to know the real trend, because some people after two-week hunger strike may catch a mirage.
:)
The hardest part is 'stable'. It doesn't matter how much. For a stable income exceeding the bank's interest you will be gilded by any decent investment fund.
Warren Buffett rarely buys, not because he expects something, but because he does serious research on specific companies.
If you take 20 and then wait for the next month, it does not guarantee that the next month you will be 20 in the black again. It can also turn out to be 100 in the negative. Stability is the key to success, but it is not.
If we set ourselves a goal "20 pips a month is reached - let's quit trading this month and wait for the next month", is it possible to achieve something?
I don't think you're asking the question correctly, so there's going to be a lot of flubbing, so much so that the understanding of the topic may differ.
I would rephrase: Is it easy (can it be) to find a strategy with rare, low-yielding but 100% profitable entries, giving about 20 pips per month.
If we set it this way, Hamlet's question will disappear: whether to work further, if the norm is fulfilled. :))
20 pips easy! You sit there for a week or two, waiting for the real trend to appear, and when it arrives, you take them so hot. The main thing is not to make a mistake, you have to know the real trend. Some people may catch a mirage after a two-week hunger strike.
:)
Well, here is the recipe for success: make a carefully calibrated system on one pair with an M.O. of 20 pips and very rare entries (once a month) - and then multiply it by 50 pairs. So that's 1000 pips a month, what's easier...
P.S. I saw your reply, Victor. I wrote in the first post that the question was provocative.
Well, here is the recipe for success: make a carefully calibrated system on one pair with an M.O. of 20 pips and very rare entries (once a month) - and then multiply it by 50 pairs. That's 1000 pips a month, what's easier...
P.S. Saw your reply, Victor. I wrote in my first message that the question is provocative.
That is, all the EA development will boil down to searching for a safe corridor of 20 pips over a long period of time. The fact that this corridor will be as safe in the future is not guaranteed, especially for 50 pairs. It will surely shift. Especially, in such a corridor the SL should be 3-5 times bigger than the take line. One octopus and 3-5 months of work will be wasted. Thus, it is better to determine the weekly trend and use a micro lot in this trend for a long time. Even on 100 pairs it will take profit. Entry - once a year.
My personal opinion. It is better to enter less, but more often, so there is an opportunity to overlap losing trades with profitable ones at the expense of their number. It is just psychologically hard (at least for me) to be in excellent plus one month and then in a bad loss, if you enter rarely and a lot. Also it is psychologically difficult to let profits grow when a deal is long-term and the money is big (and if partially my own). Numbers of nights in which "slept little" and "hardly slept" grow exponentially. Who traded this way, will understand me.
And as for the probability, it seems to me the degree of accuracy of opening of deals does not increase due to the rarity of deals. Why? Let's remember about optimization of Expert Advisors and how long it can help an EA to be profitable. And if we accumulate statistics and select parameters over a long enough period to finally reach the desired 20, the data on which we have based, collected and calculated will become irreversibly outdated, especially in such a frequently changing market as now.
Actually, I wanted to post this provocative question in a separate thread - based on the discussion in the neighbouring thread.
Beginner's intuition (often lame, but still not always) says that 20 is easier - and much easier. Especially if those 20 pips are achievable in a single trade.
The intuition of both a beginner and a seasoned pro tells me that 500 a month is not that easy.
My "theorist" intuition says that both are about equally difficult. But some worm still sits inside me and grinds me down: "Have you gone completely insane? Do you really think you can't achieve a decent, but stable, 20 pips per month (2% capital gain on a 0.1 lot position at $1K)?
If we set ourselves a goal of "20 pips a month achieved - quit trading this month and wait for next month", can we achieve anything here? Warren Buffet himself adheres to a similar strategy (do not enter more than three times a year)?
And can you be more specific in order to avoid misunderstanding or misinterpretation.
Imho from all this I understand the following.
The complexity of earning on the market comes down to the concept of efficacy, from which the distribution bell in increments is derived. From your post we can deduce that you are looking for the method of determination of effectiveness (let's call it market inefficiency) with prediction of price movement of X points with the probability ..... .
I think that too many people will confirm that market imperfection does exist, like this one.
Now to the question of detection. We need practitioners, not me. But never mind the correction.
1. This is probably the time when national banks try to keep the currency in the bandwagon.
2. I wonder if it is an hour after the release of important news, or if it swings. I do not know which one.
3. the change in the angle of linear regression with sigma reduction .
4. Toad will surely come afterwards .
5. Imho the guaranteed target of 20 pips in one trade should be reduced . until you come to your senses, until this and that.
6. on one currency pair may be more than one defective day per month .
7. The correlation between the movement of currencies of one region, e.g. Europe .
I don't think you're looking at the right end, it doesn't matter if it's 20 pips 100 or 500 profit. The important thing is something else.
It is the accuracy and precision of the trade, and this is defined by the drawdown in pips. Precise entering. You should always be able to breakeven. The ideal is a 0 points drawdown and not one pip against you after your entering the market. Let it be 20, 30, 100 trades with zero profit, the main thing is no loss. You will catch your 20, 30, 100 pips one day.
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Actually I wanted to put this provocative question in a separate thread - as a result of discussion in the next thread.
Beginner's intuition (often lame, but still not always) says that 20 is easier - and much easier. Especially if those 20 pips are achievable in a single trade.
The intuition of both a beginner and a seasoned pro tells me that 500 a month is not that easy.
My "theorist" intuition says that both are about equally difficult. But some worm still sits inside me and grinds me down: "Have you gone completely insane? Do you really think you can't achieve a decent, but stable, 20 pips per month (2% capital gain on a 0.1 lot position at $1K)?
If we set ourselves a goal of "20 pips a month achieved - quit trading this month and wait for next month", can we achieve anything here? Warren Buffet himself adheres to similar strategy (do not enter more than three times a year)?