Is 6 pips a day enough for you? | Forex Factory

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Is 6 pips a day enough for you?

  • #1
  • First Post: Edited Jun 1, 2008 8:23am May 30, 2008 3:30pm | Edited Jun 1, 2008 8:23am
I know it is for me...see two attached spreadsheets, both are the same sheet, the first assumes an account size of $50,000 to start and the other assumes an account size of $500 to start, just something to play with.
Attached File(s)
File Type: xls Theoretical.xls   31 KB | 1,403 downloads | Uploaded Jun 1, 2008 8:23am
File Type: xls TheoreticalMicro.xls   31 KB | 1,650 downloads | Uploaded Jun 1, 2008 8:23am
  • #2
  • May 30, 2008 3:38pm May 30, 2008 3:38pm
First, you need to think about the risk per trade. 5% is the maximum you should be allowed to take. I don't know about that theoretical chart but this chart could help you.
Attached File(s)
File Type: xls Percentage Equity Model.xls   91 KB | 1,068 downloads
  • #3
  • May 30, 2008 3:39pm May 30, 2008 3:39pm
Why is that?

I recently started a thread about this very subject and got a few replies, most of which were meaningless and deleted by the administrators here at FF. But no answers!

10 pips a day will make you a million in a year starting with one lot. And yet, and yet!

Theory, never action. I tried to find out WHY this never happens. It's very odd because it seems so simple. Van Tharpe would naturally say psychology. Perhaps, or fate, or deals with the Devil is a prerequisite, or or or...

I'd like to know what's up that simple compounding of modest daily profits would lead to 10 times better returns than even Larry Williams, who has the greatest return to date.
  • #4
  • May 30, 2008 3:42pm May 30, 2008 3:42pm
Quoting Lohr
Why is that?

I recently started a thread about this very subject and got a few replies, most of which were meaningless and deleted by the administrators here at FF. But no answers!

10 pips a day will make you a million in a year starting with one lot. And yet, and yet!

Theory, never action. I tried to find out WHY this never happens. It's very odd because it seems so simple. Van Tharpe would naturally say psychology. Perhaps, or fate, or deals with the Devil is a prerequisite, or or or...

I'd like to know what's up that simple compounding of modest daily profits would lead to 10 times better returns than even Larry Williams, who has the greatest return to date.
What could be so hard about it? Think about the net total of winning trades and losing trades and you can get up there.

EDIT: Don't think about how many pips you can get each day, think about the net total of trades you have. If you can do more winning than losing trades, then forex is for you.
  • #5
  • May 30, 2008 3:44pm May 30, 2008 3:44pm
I posted this just for entertainment reasons mostly, I am not saying it is something that can be done every day 100% of the time. Personally I trade on 5 second charts (a scalper) so my MM style is a little different than most.
  • #6
  • May 30, 2008 4:38pm May 30, 2008 4:38pm
Quoting Lohr

But no answers!
Whats this?

Quoting pamelomarcos
if you go for 10 pips a day, its conservative, but not all will be winners, and the losing trades, will probably be more than 10 pips loss
  • #7
  • May 30, 2008 4:42pm May 30, 2008 4:42pm
I average a measley 1 pip a day, but that returns on average about 5% a month. This month I had 26 trades with 73% positive. Average gain was 2 pips; average loss was 2 pips. I never had greater than 1.5% peak to valley drawdown.

My point is that small gains can produce a reasonable, consistant return.

Trading is a business.
Visit my journal here.
  • #8
  • May 30, 2008 5:08pm May 30, 2008 5:08pm
Exactly, I average 2-15 pips a day with hi lots, more than enough for bread and water High probability setups with limited exposure to the market works for me, not for everyone but to each their own.
  • #9
  • May 30, 2008 5:12pm May 30, 2008 5:12pm
Quoting Vfforexlee
First, you need to think about the risk per trade. 5% is the maximum you should be allowed to take. I don't know about that theoretical chart but this chart could help you.
Sorry this does nothing for me as the way I trade my settings would not fit into this spreadsheet. Good post though, I'm sure others can make use of it.
  • #10
  • May 30, 2008 5:17pm May 30, 2008 5:17pm
yet another "X pips a day thread"

let me tell you the logical fallacy with this idea....

 

  1. every single day, you count on overcoming the spread + X pips
  2. you need a plan for when the trade goes through 5PM (rollover premium will kill X pips if swap is negative)
  3. what is the risk to reward? is it 2:1? 5:1? 100:1? if 2:1, it doesn't take much to lose a trade when the stoploss is X/2.
  4. If your account draws down 50%, you have to make 100% to reach break even. You have to make 900% if you draw down 90%. The point is, losing X pips means making more than X pips just to recover.

So what makes you think you can consistently be on the right side of the trades? You have a lot going against you.

Can it be done? Yes. Is it likely? No. Take a look here:

http://www.ckowyong.com/blog/statements/shark/

The highly acclaimed Shark EA, with a tiny take profit and large stop. It doesn't take much to kill the account. This is a a small example of the X pips / day problem.

  • #11
  • May 30, 2008 5:24pm May 30, 2008 5:24pm
Quoting tdion
yet another "X pips a day thread"

let me tell you the logical fallacy with this idea....

  1. every single day, you count on overcoming the spread + X pips
  2. you need a plan for when the trade goes through 5PM (rollover premium will kill X pips if swap is negative)
  3. what is the risk to reward? is it 2:1? 5:1? 100:1? if 2:1, it doesn't take much to lose a trade when the stoploss is X/2.
  4. If your account draws down 50%, you have to make 100% to reach break even. You have to make 900% if you draw down 90%. The point is, losing X pips means making more than X pips just to recover.

So what makes you think you can consistently be on the right side of the trades? You have a lot going against you.

Can it be done? Yes. Is it likely? No. Take a look here:

http://www.ckowyong.com/blog/statements/shark/

The highly acclaimed Shark EA, with a tiny take profit and large stop. It doesn't take much to kill the account. This is a a small example of the X pips / day problem.

hehe I was waiting for your response, if I remember correctly you had responded to some other similar posts in the past. Anyway, like I said this post was merely for entertainment but it does hold some validity in which I will give my input a little later tonight, as for right now I am headed out the door.
  • #12
  • May 30, 2008 7:48pm May 30, 2008 7:48pm
If I had a dollar a day put in savings at 3% interest compounded annually...

Now if the same was compounded daily...

Now if I had a penny, doubled it the next day, doubled that the next day and so on...

Hey, I got a theory!

If everyone was busy trading instead of calculating hypothetical scenarios, we would have less hypothetical threads!
Not all sins are created equal
  • #13
  • May 30, 2008 8:11pm May 30, 2008 8:11pm
Quoting Jay Walker
If everyone was busy trading instead of calculating hypothetical scenarios, we would have less hypothetical threads!
Hypothetically speaking of course.... LOL!

To the orginal poster: No 6 pips a day is not enough for me.

I think we all go through a phase in our trading where we look at the possibilities of something like this. In fact, mine was called "10 to win". 10 pips a day was all I was looking for. In theory it works great. In reality it is a pain in the a**. In my case it stemmed from a fear of the trade turning against me when at one point it was up about 10 pips. Experience got me over it.

I no longer set a daily pip goal. Instead I just look for the most ideal setups and then make my entry. The way I trade now is much easier on the heart. And when you average it out over a month, I make far more than 6 pips a day even if you included the weekend.
  • #14
  • May 30, 2008 8:26pm May 30, 2008 8:26pm
So how do you guys follow money management? Is this not one of the most important principles to the financial market?
  • #15
  • May 30, 2008 8:31pm May 30, 2008 8:31pm
Hi..

Just a few things...

where do you get a 5 sec chart...and for those that are profitable using the small pip theory.....I never seem to see any posting in a journal and if there is one guide me to it...I would be interested to take a look even though it is not for me....I just cant do it....and don't really want to.
  • #16
  • May 30, 2008 9:28pm May 30, 2008 9:28pm


Quoting magnumfreak
I no longer set a daily pip goal. Instead I just look for the most ideal setups and then make my entry. The way I trade now is much easier on the heart. And when you average it out over a month, I make far more than 6 pips a day even if you included the weekend.
  • #17
  • May 30, 2008 9:33pm May 30, 2008 9:33pm
The 6 pips a day is just a number, I have been using linuxtroll's simple scalping method and fitted it to my needs. After a LOT of screentime things have been working great for me. I don't want to go into a lot of detail as that was not the intent of this thread but to summarize I watch only 1 pair during very specific hours of the day when it moves well, I place a few high probability trades and I'm done for the day in less than 2 hours sometimes within 30 minutes. I use high leverage and a large percentage of my account, very rarely does the market turn on me, when it does I simply get out as soon as I detect it with only a few pip loss at max. For instance I made 5 trades today, 4 winners and 1 loser and the loser was placed on accident, I lost 3 pips on the loser and made 8 on the other trades. Could I have made more? Sure but I took my guaranteed profits early, greed will kill you so all in all today was "ok" with a net of 5 pips at 3 full lots you do the math. Good days I net roughly 15 pips sometimes more, bad days I net 3 pips or so, always end the day positive, get in, get out and your done. Scalping does not have to be sitting in front of the computer allllll day long, and I don't have trades open overnight or while I'm gone wondering where they are sitting, I know how much I made for the day before most people wakt up Once again to each their own.

And for 5 Second charts (sometimes I use 1 second as well) I use MBT through Ninja Trader, currently looking for a good currenex broker....
  • #18
  • May 30, 2008 9:33pm May 30, 2008 9:33pm
Quoting Jay Walker
...
If everyone was busy trading instead of calculating hypothetical scenarios, we would have less hypothetical threads!
"What if there were no Hypothetical Questions?"... Loop...
Hypothetically Speaking so to speak...
  • #19
  • May 30, 2008 9:36pm May 30, 2008 9:36pm
I almost forgot, I don't have a daily pip goal either. The 6 pips was just an example for this thread. I trade a 2 hour max session each day, whatever the market gives me during those 2 hours I take. Sometimes I make good money within minutes and I quit for the day it just depends, I also have another 2 hour session I trade (for a total of two 2 hour sessions each day) if I feel like trading or have nothing else to do or simply feel like making more money
  • #20
  • May 30, 2008 9:45pm May 30, 2008 9:45pm
Quoting Jay Walker
If I had a dollar a day put in savings at 3% interest compounded annually...

Now if the same was compounded daily...

Now if I had a penny, doubled it the next day, doubled that the next day and so on...

Hey, I got a theory!

If everyone was busy trading instead of calculating hypothetical scenarios, we would have less hypothetical threads!
Trading costs me no more than 2 hours a day, I have to find something to do with the other 22 hours.
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