A very precise question on money, pips and Scalping

Hi People of Earth,

I'm a new scalper, and I'm thinking about something that I can't find the answer clearly anywhere.

Let's say I'm made a trade this morning on the EUR / USD, m1.

Let's say this trade was 15 pips, with a risk of 7 pips (stop loss of 7 pips).

So, it's impossible to know how much money I earned, until you know how much I put in the trade. Maybe each pip value is 2 dollars, or each pip value is 15 dollars.

I think there is a limit to how much money you can put on a trade on scalping, on m1, too much money and I think you won't be able to profit from it, it won't work that well. At least I suppose it.

I've seen many traders go up to 25 € per pip (yeah I'm in Europe). So, this gives for the trade of 15 pips, 25 X 15 = 375 € of profit (of course there is the % for the broker to add, and taxes after this, of course but it's not what matter here).

This gives, if I take this amount of money, a clear limitation of 25 € per pips maximum, let's say I'm so good I can make 20 pips per day on average (it's not real, just as an example). 20 x 25 = 500 €.

Thatgives 500 € per day, and if you're in a HUGE taxes country like mine, you can nearly cut this in half with taxes. So 250 € per day. 20 Days of trading on average in the month : 250 X 20 = 5000 €. Not that bad if possible.

WELL, all of this to get to this simple question because I couldn't find the answer anywhere for now.

How do you know how much money you can put on a trade on scalping, on m1 on a market like EUR/USD, or the GER30, or any other market ? Would it be possible to put more, like 50 € per pips ? Where is the limit ? Is there a way to know that ?

This question is sooooo important because if you can do on average 10 pips per day, the maximum you can put on a trade with the maximum pip value possible will define ultimately how much money you can earn from those 10 pips a day.

25 € ? 25 € X 10 pips X 20 days = 5000 € earning potential. 60 € ? 60 € X 10 pips X 20 days = 12 000 € earning potential.
It's clearly not the same thing.

P.S : maybe 25 € per pip is even a little too much and bold, I clearly don't know about that for now. If a nice and skiller scalper could answer about this, that would be AWESOME !!!

Thank you very much

hello,
you can calculate as you like.
Nothing comes of it.
the reason is reality.
start small and win 20 euros every day.
have fun

What you actually want to know is how high your spread will be, because this determines whether bets on small market movements are worthwhile. So the question is first of all for yourself, how high are your smaller profits and also the losses, because remember: both are getting bigger. However, 15 pip for a bet is quite something and allows for substantially bigger bets.
Your question of costs can be read from the VWAP, i.e. the volume-weighted average price. What Metatrader users always perceive as the spread is actually the distance between the best ask and bid price. Ask is the price you can buy for and Bid is the price someone else offers if you want to sell. Both logically have a volume, because you can only buy what someone else is willing to sell and vice versa. It can look like this


Click: https://s3-eu-west-1.amazonaws.com/l...dget-vwap.html

Please note that this is just an exemplary case from the broker LMAX, prices will differ with other brokers especially because LMAX is a non-lastlook broker, which makes visible prices in the book a bit worse but executed prices a bit closer to these.

Just enter something else at the top where it now says 1M. By the way, 1M is 1 million, i.e. 10 lots, 100 per pip. You can therefore already assume that there is still a lot of room for improvement in your stakes. Irrespective of the fact that your mentioned stakes, whether 10, 15 or 50 EUR per pip, are rather traces of peanuts than peanuts, there is of course also the question of when you buy or sell. First of all, of course, which session (Asia, London, New York) you trade and which currency pairs, but above all the fact that liquidity, i.e. the competition between different market participants providing liquidity, decreases drastically for a short time during news outbreaks because their job is not to profit from rising or falling prices but from the difference they sell to you and buy from another participant, moments of fast-moving markets are their biggest risk so this is when they become scarce.

In any case, I would strongly advise for a few things: Get profitable first and don't think about maxing out your stake for quite a while. Once you trade significant position sizes, make yourself familiar with the different order types such as Fill or kill (FOK, full or none at all) and immediate or cancel (IOC, immediate but possibly partial fill or none at all) that are available once you look at more professional offerings than MetaTrader and the usually retail-gang. Some platforms also offer means to attach a slippage control to a market order which is sometimes referred to as a market range order then.

On a side note, I'm a short-term trader, too which some would call scalping and I'm comfortably trading north of 1500 USD per pip on the majors. I chose to live in a low-tax country in the south of Europe after I left London.

Hi Focusedmind,
I would say that, first and foremost, you need to relate your position size to the size of your account, not to the maximum position the market will bear. If you want to live a long time in trading you need to carefully manage your risk. Your position size should be such that you are only risking a tiny % of your account at the worst case stop loss on any trade. As soon as you start taking big positions relative to your account you introduce in a real way the risk of ruin, and you will be making trading much more demanding for yourself, emotionally/psychologically speaking. Neither are a great idea.

That said, to specifically address your question, for just about all retail traders a liquid and active market like GER40 (30 has been recently expanded to 40) or EUR/USD it is very unlikely you will run into a material problem with the ability of the market to efficiently take your position; you'd need an institutional size account before you need start routinely worrying about liquidity considerations. If you are having problems it's more likely to do with your counterparty/broker not being much good and/or you are dealing outside of active hours.

It will depend. I.e. on your risk, stop-out level, margin call level, leverage. What you risk must not put you below stop-out or margin call level. Then the max money is
(I will use i.e. E/U and in $):
Risk (in pips) times $10 (=pip value) equals loss per standard lot. From this and your balance, the max leverage and forementioned levels, you derive how many standard lots you can trade, and from the number of standard lots you can trade, times the pips you gain, you derive the total dollar gain (and you also have to accomodate for brokerage fees, spread, slippage).

A simplified example: Say your balance is $1000, your stop-out level is 50% (the greater of the two: stop-out and margin call level), so you can max afford to lose $500 on the trade; if your stop-loss is 7 pips, which is $70 per standard lot, you can trade at least 7 std. lots (500/70) if your leverage allows so. If you gain 15 pips on 7 std. lots you gain a total $1050.

example, writing wisely is one thing transposing something else.

you need nerves of steel and trust.

GOLD

Theres no limit in trading or sky is the limit. The question is how much u can handle per day. I assume u trade manually u should ask yourself how many trades that u can make per day no pips. U will think hit one pip is easy bt it isn't in real world at least not in consistent mode unless u have traded for years and u know a certain pattern within market that you trade. For me 4-5 trades is already my max and for your case u might wanna scale it down instead of looking to bag 10 straight win in a day.

I think it’s good to put only a small amount into each trade in scalping, because this is a strategy where we are fighting for small wins. It’s okay to risk less and gain as little as 5-10pips each trade. Also,how many trades you should take in a day should depend on your capacity.