what ive been doing lately: profitable?

Lately I came to suspect that ive just been greedy. I only want/need 50-100 pips a week so why set huge tps?

For that matter why trade such monstrously volitile pairs like gdp/jpy?

Eur/usd+ usd/jap have 3 point spreads on my platform, and are even a bit easier to predict in their movements.

So ive just been using my knowledge of chart reading- which is at best at a break even level in the long term, and applying it to less greedy frames.

at 5pm when i get a new day candle i read these two charts, decide which way they are going and set a 13 pip tp. This scalping method got me 100 pips last week and I haven't been wrong once: after all even if it goes in the other direction, even with the little volatility of these two pairs my tp tends to get hit by the next day.

Only problem is my only exit strategy really is a tp. My Sl has to be set far enough that it can move enough and still be likely to hit my tp. So if i actually had a losing day I could actually have awful losses: like a weeks profit lost in one day.
So profit/loss risk ratio is really rough. Basically it feels like gambling but that the probability is tipped in my favor.

Is this a horribly foolish method in the long run?

You did a nice analysis of the pros and cons of a small take profit / large stop loss trading plan.

Pro: easy to hit the TP level
Con: one wrong move and you give up a substantial profit.

Granted, I haven't retired with an 80 foot yacht and a Ferrari with my FX profits yet, but I have experienced much more success with the exact opposite scheme: tighter stops and bigger take profits.

I think that if you are wrong about a direction of a trade you need to get out. Fast. I always start looking for a sign that I'm wrong about market direction once I put a trade on. My #1 goal is to keep losses to a minimum - protect my prinicpal. This will keep you in the game far longer giving you more opportunity for the home run trades that will fatten your account. Wins and losses will occur and it isn't necessarily about being right all the time. Rather, it is about netting more pips than you lose. When you have such a tight TP and wide SL you need to have ridiculously high win rates.

I see a version of this all the time in stock protfolios - people tend to hold on to losers and let them tank while selling off their winners as soon as they see the hint of daylight. It is no wonder that individual investors average 2% annual returns on their own.

I don't know if your plan is horribly foolish or not - I guess you'll have to see where your account balance ends up. However, I believe you have stacked the deck against yourself. I think of it like a game of Russian roulette. Your odds of being right are pretty high - 5 out of 6 (an amazing 83% win rate!!). The problem is that 1 chance in 6 where you land on a live bullet and it blows your brains out. Though that only happens about 17% of the time, Russian roulette is not a particularily popular hobby.

Maybe you could try this instead........
nice wide TP, with a SL that gives the market some breathing room......then follow the market with a trailing stop, getting to BE as soon as feasable, after that it's gravy.......just a thought.

Dave couldn't have said it better--Stacking the deck against yourself. Say you have a few bad trades and take your account down by 20% by using large stops. You now have to make a 25% gain to bring it back to par. And you have to do it with small TP's.

Try going back over your trades and pretend you used a little higher TP and a little tighter SL. Then tweak your Tp's and Sl's a little more.
Scalping small TP's may turn out to be your niche. But experienced scalpers are usually the first ones out when price goes against them.

trick is its the first time ive been profitable in weeks. Basically its gambling i guess to say- hey itll probley at least go up by 13.
I suppose I could use atr of smaller timeframes, or support/resistance of smaller timeframes to set conservative sl, but those lower timeframes take alot of patience eh?