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9000 pips a year after spreads

  • #1
  • First Post: Jan 26, 2008 2:51pm Jan 26, 2008 2:51pm
Am I missing something. Is 9000 pips a year gained after spreads figured in suppose to be something unattainable or a rarity. I would think otherwise.

Abi
  • #2
  • Jan 26, 2008 3:14pm Jan 26, 2008 3:14pm
A systematic approach to a pair (or several pairs) will vary from year to year. Every market is different than the previous year's market, so attempting to "predict" the pip gains in advance is futile.

In short, 9,000 pips is attainable with luck, and can not be benchmarked as a realistic goal year in and year out. I'd like others to dispute this.
  • #3
  • Jan 26, 2008 3:49pm Jan 26, 2008 3:49pm
Quoting tdion
A systematic approach to a pair (or several pairs) will vary from year to year. Every market is different than the previous year's market, so attempting to "predict" the pip gains in advance is futile.

In short, 9,000 pips is attainable with luck, and can not be benchmarked as a realistic goal year in and year out. I'd like others to dispute this.
I'll dispute it. It is indeed attainable as a net aggregate across all your pairs of trading. Average 50 pips a day spread across four pairs and you're going to do better than just 9,000 pips. And don't give me something about "you can't do that, that's asking too much of the market". Bunk! Bunk I say!

This is why you develop more than one system. It takes more than just a hammer to build a house, so why would you only try and build your account with one tool?

Getting back to the heart of reality, why are you shooting for a pip target? You should be shooting for a percentage gain on your initial investment. It doesn't matter if you make 111,000 pips this year if you've only gained 1% on your capital. I'd rather make 1,100 pips this year and get 111% gain in capital.
Never underestimate the powers of the Force.
  • #4
  • Jan 26, 2008 4:26pm Jan 26, 2008 4:26pm
Why limit yourself. Shot for 9000 pips an hour. Hell why not per trade.

:
  • #5
  • Jan 26, 2008 4:37pm Jan 26, 2008 4:37pm
1) You need volatility to capture movement.

2) You need to time movements right.

3) You need to be on the right side of the trade.

4) You need to beat spreads and rollover premiums.


A tall order to say the least, as random as forex markets are.
  • #6
  • Jan 26, 2008 5:00pm Jan 26, 2008 5:00pm
My best Day was almost 1000 Pips trading 6 Pairs. So it's possible.
  • #7
  • Jan 26, 2008 5:23pm Jan 26, 2008 5:23pm
Quoting The Jedi
I'll dispute it. It is indeed attainable as a net aggregate across all your pairs of trading. Average 50 pips a day spread across four pairs and you're going to do better than just 9,000 pips. And don't give me something about "you can't do that, that's asking too much of the market". Bunk! Bunk I say!

This is why you develop more than one system. It takes more than just a hammer to build a house, so why would you only try and build your account with one tool?

Getting back to the heart of reality, why are you shooting for a pip target? You should be shooting for a percentage gain on your initial investment. It doesn't matter if you make 111,000 pips this year if you've only gained 1% on your capital. I'd rather make 1,100 pips this year and get 111% gain in capital.

I will dispute it also, with a personal conviction seeing it myself. I brought this up to try to get traders to think outside of the box. Outside of the trading indicator world. There exists a beautiful way to trade. Not perfect, only 40% wins, but captures every run that makes the "let your profits run" a real part of your trading and also keeps the losses small.

More importantly is the positive expectancy of the system and most importantly is position sizing and position sizing to meet your objectives for return and keeping drawdowns to your emotional tolerance and desires-objectives.

Its been ALOT of time and work to, but enjoyable because its a passion and a love.
Abi
  • #8
  • Jan 26, 2008 5:31pm Jan 26, 2008 5:31pm
Quoting tdion
1) You need volatility to capture movement.

2) You need to time movements right.

3) You need to be on the right side of the trade.

4) You need to beat spreads and rollover premiums.

A tall order to say the least, as random as forex markets are.
I hope you hit your epiphany and realise that yes it is in fact quite doable to gain 9,000 pips in a year. That's under 200 pips a week. Trade four pairs, that's fifty pips a week per pair. Break that down again, that's 10 pips a day per pair. The great thing is, this is just a total aggregate, some pairs are going to outperform others and boost the total count. The beauty of diversification. That said, I still maintain that you should be shooting for a total return on investment instead.
Never underestimate the powers of the Force.
  • #9
  • Jan 26, 2008 5:54pm Jan 26, 2008 5:54pm
It is doable, but I've never seen anyone do it with a live account ever.

In fact, I've seen several systems backtest for +7000 pips one year, and -8000 pips others.

Aggregation, as you say, really doesn't do much for you.

Luck is luck. Show statements, otherwise it is nothing more than a tall claim....


PS) The "$1000 to $100000 in one week" thread exemplifies that extraordinary returns are available from time to time.... however, the author of that thread says these returns are very rare.
  • #10
  • Jan 26, 2008 6:10pm Jan 26, 2008 6:10pm
Quoting tdion
Aggregation, as you say, really doesn't do much for you.
How does one system on one pair prove that aggregation doesn't work in your favor? Also, if you've seen a system make 7000+ pips in a year, how is that indicative of all systems?
Never underestimate the powers of the Force.
  • #11
  • Jan 26, 2008 6:16pm Jan 26, 2008 6:16pm
7,000 is the highest I've seen. Of course my eyes can't witness all systems in God's creation, but 7,000 is VERY high.

Aggregation doesn't help because you risk all systems losing at once. Trading 8 systems on 8 pairs is as risky as trading 1 system on 1 pair.... they all can fail and nothing can stop it.

Luck is luck.... my position is that my cleverness is always trumped by the market being random.
  • #12
  • Jan 26, 2008 6:27pm Jan 26, 2008 6:27pm
Quoting tdion
7,000 is the highest I've seen. Of course my eyes can't witness all systems in God's creation, but 7,000 is VERY high.

Aggregation doesn't help because you risk all systems losing at once. Trading 8 systems on 8 pairs is as risky as trading 1 system on 1 pair.... they all can fail and nothing can stop it.

Luck is luck.... my position is that my cleverness is always trumped by the market being random.
There is a chance they can all lose at once, and, god forbid, there is a chance they can all win too. By adding more systems to the mix with a good expectancy, you in fact lower the risk that it will all backfire on you. Instead of just taking one item to backfire on you, you now require all eight to backfire. And if one backfires but the other seven succeed, you should still head above water. Hooray for probabilities!
Never underestimate the powers of the Force.
  • #13
  • Jan 26, 2008 6:56pm Jan 26, 2008 6:56pm
7000 in a year is not very much imho.
It's possible to make that kind of pips in a month.
Last days I gained sometimes +200 Pips on the Euro alone.
You'd need only 350 pips a day to achive 7k in a month.
  • #14
  • Jan 26, 2008 7:16pm Jan 26, 2008 7:16pm
Quoting Linus78
7000 in a year is not very much imho.
It's possible to make that kind of pips in a month.
Last days I gained sometimes +200 Pips on the Euro alone.
You'd need only 350 pips a day to achive 7k in a month.
No you only need 350 pips each and every day otherwise you need some days to net more than 350 pips to make up for the days you lose.

I hate it when that happens, but then again I hate it when I pinch myself and there is pain. Reality sucks. Oh instead lets get back to talking about making 9000 pips.

Because why waste time talking about what is probable when we can talk about what is possible if the moon and stars all align throughout the universe. The only thing more exciting than that might be a bunch of university professors giving a lecture.
  • #15
  • Jan 26, 2008 7:30pm Jan 26, 2008 7:30pm
Quote
There is a chance they can all lose at once, and, god forbid, there is a chance they can all win too. By adding more systems to the mix with a good expectancy, you in fact lower the risk that it will all backfire on you. Instead of just taking one item to backfire on you, you now require all eight to backfire. And if one backfires but the other seven succeed, you should still head above water. Hooray for probabilities!

New to forex, but not risk management in general... while it's true that investing across pairs can improve your return and spread out the loss of a losing trade, it does expose you to additional period risks like a sudden shift in market direction or a major news event.

Just be sure that your overall investment risk is still only a partial % of your account. I can't see investing over 15% of my equity at any point in time (at the very high end, 10% may be more appropriate, YMMV). At 3% per trade that's 3 to 5 concurrent trades, at 2% that's 5 to 7, etc.

Be nice to see how others handle multiple trade risk and what factors they add into the mix. How much of your overall equity would you have traded at any 1 time? Have you ever had a catastrophic drawdown because of it?

And while the market is random, our timing is not. If you were shooting for atleast a 9 between 2 rolls of dice, but didn't have to bet until after the first dice had rolled... you'd probably want to hold off betting until the first roll was a 6, right? That gives you a 3, 4, 5 and a 6 as possible wins... so while the possibility of a 9 or greater between 2 dice is relatively low, the possibility of atleast a 9 between 2 dice where 1 of them is a six... is 2/3rds. Shoot enough of them and the individual random distribution doesn't matter, the law of averages plays out. So yes, trading more does help reduce your average risk over time... provided no individual block of time is more risky than any other (which is untrue in the markets, obviously) and your method gives you a greater than 50% odds (which may or may not be true for any given approach in any given market).

Hence the importance of money management, appropriate risk handling, a consistent edged approach and a statistically confident number of trades.

Can you do 9k pips in a year? I don't see why not, but how much $ per pip are you talking? What I mean is this... if your risk % is very high you may suffer large drawdowns. You might be able to turn 9k pips, but the compounding could be hampered by a periods of very low equity... at $1 per pip that's only $9k. Meanwhile 2000 pips with much less average drawdown could end up being worth far more if your compounding higher numbers along the way, and might end up averaging $5 or $10 a pip. Of course that's all fantasy, risk is married to reward... ROI and risk/reward seem better metrics than sheer pip counts IMNO (in my newbly opinion).
  • #16
  • Jan 26, 2008 7:37pm Jan 26, 2008 7:37pm
Pip tallies alone are meaningless. Percentage targets should be used. 9k pips represents a world of difference between GBP/NOK and EUR/USD.

In any case, if you can return >20% on an annual basis, year in and year out, you've accomplished what 99% of professional CTAs cannot. Anyone with such ridiculous aspirations should read FX Analytic's great thread and get their heads grounded in reality (before they blow up).
  • #17
  • Jan 26, 2008 9:23pm Jan 26, 2008 9:23pm
20% on an annual basis is a good return. But, I do think there are some folks out there doing 9000 pips a year.
Losing 90,000 pips a year is also very easy if you don't have a system.
  • #18
  • Last Post: Jan 26, 2008 10:05pm Jan 26, 2008 10:05pm
Now you're talking my language....

Quoting Rabid
Meanwhile 2000 pips with much less average drawdown could end up being worth far more if your compounding higher numbers along the way,
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