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I don't get how 10 pips a day can make you rich?

  • #21
  • Nov 18, 2010 8:02pm Nov 18, 2010 8:02pm
Quoting beehivesjoe
Can you go into a little more detail about this please?
If I told you I meade 10 pips today then I havent really given you any information

10 pips to me might be $10,000 or it might be 10 cents

It may have been a 10% increase in my account or it may have been .01%

Then theres the risk - If I risked 10 pips every trade then this means nothing becasue I could make 1 pip equal $1000 or 1 pip equal $1

I could be risking 10% I could be risking 1%

Therefore when Im in profit do I really care how many pips I make? No its more about % increase as I adjust the value of a pip to mean that I never risk more than 2% on a trade... Therefore a 4% profit would be a reward factor of twice what I risked...

Sorry I dont think I explained myself very well i really thught it would be easier than that lol
Time hides Nothing
  • #22
  • Nov 18, 2010 9:17pm Nov 18, 2010 9:17pm
Choice #3 sounds nice. If listen, market tells #pips: Max when. %acct? >W:L.
  • #23
  • Nov 18, 2010 9:42pm Nov 18, 2010 9:42pm
wtf?

there is an entire forum already filled to the brim with answers for these super-beginner-know-nothing questions. funny thing is it's THIS forum.

this thread is fail. go open a demo account and open some orders and SEE what happens to the equity. it's not rocket science, you just need to go and do it and experience it first.
Congratulations ScalaFX for coming out of the closet!
  • #24
  • Nov 20, 2010 4:14am Nov 20, 2010 4:14am
Quoting CindyXXXX
If I told you I meade 10 pips today then I havent really given you any information

10 pips to me might be $10,000 or it might be 10 cents

It may have been a 10% increase in my account or it may have been .01%

Then theres the risk - If I risked 10 pips every trade then this means nothing becasue I could make 1 pip equal $1000 or 1 pip equal $1

I could be risking 10% I could be risking 1%

Therefore when Im in profit do I really care how many pips I make? No its more about % increase as I adjust the value of a pip to mean that I never risk...
Hi Joe,

I would have to second what CindyXXXX says. It matters not whether you make 10 pips, 100 pips, 1000 pips (other than the fact that the spread hits you hardest on your 10 pips)... it matters how you size your position to risk.

Whilst I am not Oanda's greatest fan they make position sizing very easy. If for example you wanted to risk 2% of your account on a trade, Oanda will allow you to input your entry price and stop loss etc and will show you (based on how many "lots" you trade) exactly what your $risk is - so that you can tailor your position to your %risk.

So the question really is... can you actually get your 10 pips per day? If you can (and you do it without silly risk) then it is a fine way to make your money.

Regards,

Dan
  • #25
  • Nov 20, 2010 5:58am Nov 20, 2010 5:58am
Quoting DanUK
Hi Joe,

I would have to second what CindyXXXX says. It matters not whether you make 10 pips, 100 pips, 1000 pips (other than the fact that the spread hits you hardest on your 10 pips)... it matters how you size your position to risk.

Whilst I am not Oanda's greatest fan they make position sizing very easy. If for example you wanted to risk 2% of your account on a trade, Oanda will allow you to input your entry price and stop loss etc and will show you (based on how many "lots" you trade) exactly what your $risk is - so that you can tailor...
I agree with Dan. Starting from March I've been doing 3% daily and lately 2.5% (since my lots got bigger), by earning around 30pips a day. 30 pips can be achieved by most systems out there if you follow them carefully and have a general feel for the market. Some days that were flat, I actually managed to get my 3% with 15pips. Although bringing consistently 10pips daily sounds easy it is not due to our psycology. You have to ignore the amount of money and focus on the pips (with the appropriate lots). This was one of my most difficult struggles. But it is definetely possible. All you have to do is stay focused and be careful with your TP, SL. Money-management and compounding will do the rest.

Kostas
  • #26
  • Nov 20, 2010 6:05am Nov 20, 2010 6:05am
I've said it before,

"The majors daily range on average is 100-250 pips. If you don't know how to catch 10pips out of a 100pip movement, you simply don't have the knowledge and experience. Love me or hate me, I'll be brutally honest to say that one does not know how to trade."

Basically, those guys who say it can't be done is saying that they can't capture 10pips in a 100pip movement of the market. So I ask, what does it take to capture 10pips?

Worst case scenario is a low volume day where a major's daily range is between 30-50pips. I'll give the exception that on these days one may not be able to capture 10pips.

The truth is sometimes hard to accept, especially when trying to convince ourselves that we can't do it (convincing ourselves of defeat). So we resort to excuses.

Excuses that says "you can't capture 10pips consistently in a market that moves 100-250pips in a day". Can somebody explain me the logic in this?
  • #27
  • Nov 20, 2010 6:32am Nov 20, 2010 6:32am
Quoting ehrek
10 points shouldn't be that difficult esp a high volume session such as the ny/london overlap.. just a matter of being patient and look for a intra-day trend and purchase on a pullback, or breakout.

My suggestion would be a low volitile pair(s) for that particular reason... be cautious, because some pairs can sneeze 10 points in mere seconds.
It works back and forth. Yes 10 pips a day, during volitile markets sounds easy but so does negative 10 pips (drawdown) and depending on your Risk/Reward most people aiming for 10 pips risk more than 10 pips so you have a negative reward factor. If you are aiming for 1:1 then you have to be aware of the spread costs which could easily account for 20-25% of your SL basis.

So how do you achieve 10 pips a day. I hear so many people say it is easy but very few hang around for long. They are usually destroyed by a combination of larger losses than rewards, a mentality that they have to hit 10 pips a day so that trade again with a great risk % to make up, they loose again and then revenge trading takes over until a complete destruction of your account has you revisting forums looking for answers to how to achieve 10 pips a day vol 2.

RT
  • #28
  • Nov 20, 2010 9:36am Nov 20, 2010 9:36am
Thanks for the wonderful posts guys! I love to see peoples opinions! No I will not be using a big stop.

HOw I see the market is it's almost purely random. You can think it's going to take off when it completely TANKS! So my philosophy is to get down on a 5 second chart during really active market (london open) and get in with a 2 pip stop and move to break even ASAP. I learned this from Tony.

One thing I dont' quite understand is account %. How do you calculate 2% account increase per day? If I use the same stop everytrade of 2 pips how do I figure out how many pips a day I need to increase my account by 2% a day? Each day wouldn't it be the same ammount of pips if I actually made the 10 pips a day because I would just change the lot size up so the pip would be worth more? By doing that I could really focus on X ammount of pips a day. Thanks for all the help guys! Sorry my math is so terrible
  • #29
  • Edited 10:08am Nov 20, 2010 9:49am | Edited 10:08am
Quoting beehivesjoe
Thanks for the wonderful posts guys! I love to see peoples opinions! No I will not be using a big stop.

How I see the market is it's almost purely random. You can think it's going to take off when it completely TANKS! So my philosophy is to get down on a 5 second chart during really active market (london open) and get in with a 2 pip stop and move to break even ASAP. I learned this from Tony.

One thing I dont' quite understand is account %. How do you calculate 2% account increase per day? If I use the same stop everytrade of 2 pips how...
I use an excel sheet so I can calculate this quickly... (only because my stop loss can change right up to the last minute before I place my trade)

Heres an example:

I want to go long with a 10 pip stop and my account balace is 10 million dollars (..it is )

I decide I only want to risk 2% on the trade which is 100,000 dollars so divide that by my 10 pip stop loss (including spread) and my pip value needs to be 100,000 / 10 = $10,000 per pip! (lol that would be fun wouldnt it)

Steps:

1 - Know how much % you are willing to risk on your next trade (Say 2%)
2 - Calculate how much money this will be of your account (for $5000 account, 2% it is $100)
3 - Decide how much room (stop loss) you will give the trade (say 10 pips)
4 - Divide your $ risk ($100) by stop loss (10 pips) and you get $10 a pip or 1 standard lot. and this is how big you make your position (1 standard lot)

So if you lose the trade you have lost 2% of your account...

If you make 20 pips that will be a 4% increase etc etc

Personally I find it so much less stressful thinking of everything in % - You're not 10 pips down for example just 2% or if you finish the day with a 1 pip profit this might be a .05% increase. It just feels better ha!

Asside from that its an important part of money management IMO

I will just add to calculate any % increase or decrease just divide your profit or loss by your original account balance before the profit or loss happened for example a $ 354 profit from a $5,000 account will be 354/5000 = .07 which is a 7% profit.

Or a loss of $200 in a $5000 account:

200/5000 = .04 or a 4% decrease in your account
Time hides Nothing
  • #30
  • Nov 20, 2010 10:26am Nov 20, 2010 10:26am
I went through something similar long before I went live. There's just so much to think about, isn't there? So many factors that influence our TPs and SLs. I too wanted to start with 10 a day and risk just the same giving me a 1:1 ratio. Theoretically, I just need a system that averaged a 50% win ratio and I was set, right? Wrong-o.

Then I realized that I have to account for spread which would make my ratio much worse depending on the instrument. Further yet, I learned about drawdown. If you plan to increase lot size as your balance grows (assuming you use, say, 4% each time. You see, 4% means a bigger and bigger number as your account grows) then you will also having a smaller and smaller lot size as your account draws down. Recovery from a big draw down become something to keep in mind.

In theory that all seemed fine if I could find an even higher percentage-winning system. But life threw me another curve ball: volatility.
On the NY-London overlap session, a 10 SL would get wrecked faster that you can blink. That's no hyperbole. One time I literally blinked after opening a trade and volatility threw my trade out the window.

But it just doesn't have to be about SL even if that's what we base our percentage risked. 10 pips is easily attainable like CrucialPoint said (check out his trading journal. Big fan) but with the idea of draw down in mind, I wanted to make my RRR 2:1 or something in that ballpark. Starting on the 1m timeframe (hey we all started somewhere or thought about it one time or another ), I found that 1m just didn't have the "kick" I was looking for to grab 20 pips.

Now let my explain myself because that just sounds absurd. You may find yourself asking "If you can pull it off on 5m or something but not 1m then what're you smoking?"
Well go to D1 and M1 and just look at it. Or even D1 and M5. To me, besides M1 being extremely choppy at points, they look similar. Higher highs, lower lows, double tops and bottoms, etc. Each bar just seems to be assigned a lower "pip-per-candle" kind of thing as you get lower on the timeframes. So a single could call a move one way, you see that it's time to get out, and see it pullback but then continue down on the M1. On the M5, it keeps going. I thought to myself "Why didn't I just trade this timeframe and get my 20 pips".

The last thing I want to talk about is something I call Reach. I don't know what I should call it and I'm sure there's a word for it. Someone please correct me if they know it, please xD
Look at the time frame of choice. Look how many pips it goes on one of your signals and see how far it "reaches" on average. On my signals on the M5, I saw that on majority it would run to 20 and then pullback or even reverse.

So we apparently must account for volatility, spread, time frame, RRR ratios, drawdown, "reach", and a plethora of other good things like that. After all that, I still don't think I have a proper TP and SL. I find myself thinking that a trailing stop is the only way to even out the inevitable: the draw down of death as I like to call it. Maybe TS is the only way to be profitable in the long run, maybe not. I'm just sharing my own experience. Hope you find what you were looking for somewhere in the hallowed halls of this forum

Maybe check out twoblink's thread on this stuff. It kind of led me in a way. It's a long read with a lot of math but if that's your slice of pie then the amount of knowledge to be gained in there is immense.
  • #31
  • Nov 20, 2010 10:31am Nov 20, 2010 10:31am
Quoting beehivesjoe
Thanks for the reply! So far it sounds like it can be done.. you just have to be super diciplined!

2 pip stop you will get stopped out in a second, to have absolute no draw-down you have a better chance at getting run over by a retail tractor (unless you get in a breakout occurring and there is no looking back)!!!

Also if you limit to 10 pips a day what if the trade keeps running.

Your post should be: Minimum 10 pips a day. Not 10 pips a day!!!
Know when to hold em, Know when to fold em!
  • #32
  • Nov 20, 2010 10:33am Nov 20, 2010 10:33am
2 pip stop you will get stopped out in a second, to have absolute no draw-down you have a better chance at getting run over by a retail tractor (unless you get in a breakout occurring and there is no looking back)!!!


Quoting beehivesjoe
Would you guys be satisfied with 10 pips a day (risking 2% per trade) Would this be enough to build your account in the long run to live sucessfully? What do you guys think?

Also if you limit to 10 pips a day what if the trade keeps running.

Your post should be: Minimum 10 pips a day. Not 10 pips a day!!!


You want to do this with great chance and little risk, go with the direction of the trend and trade 00 and 50 sweet numbers.

On a side note to get 10 pips a day minimum you should learn to rely on what the charts tell you and dont garble them up with stupid ass indicators
Know when to hold em, Know when to fold em!
  • #33
  • Nov 20, 2010 10:46am Nov 20, 2010 10:46am
Quoting goods
2 pip stop you will get stopped out in a second, to have absolute no draw-down you have a better chance at getting run over by a retail tractor (unless you get in a breakout occurring and there is no looking back)!!!





Also if you limit to 10 pips a day what if the trade keeps running.

Your post should be: Minimum 10 pips a day. Not 10 pips a day!!!


You want to do this with great chance and little risk, go with the direction of the trend and trade 00 and 50 sweet numbers.

On a side note to get 10 pips a day minimum you should learn...
Have I read this somoewhere before?
Time hides Nothing
  • #34
  • Nov 20, 2010 10:49am Nov 20, 2010 10:49am
Quoting CindyXXXX
Have I read this somoewhere before?

BWAHAHAH Get back over to the other forum
Know when to hold em, Know when to fold em!
  • #35
  • Nov 20, 2010 11:29am Nov 20, 2010 11:29am
Quoting CindyXXXX
If I told you I meade 10 pips today then I havent really given you any information

10 pips to me might be $10,000 or it might be 10 cents

It may have been a 10% increase in my account or it may have been .01%

Then theres the risk - If I risked 10 pips every trade then this means nothing becasue I could make 1 pip equal $1000 or 1 pip equal $1

I could be risking 10% I could be risking 1%

Therefore when Im in profit do I really care how many pips I make? No its more about % increase as I adjust the value of a pip to mean that I...
This is the correct way to think about this.. my trading style targets 100's of pips and may in fact be the same percentage return as yours with only 10 pips.. besides the fact that trying to target a specific pip return or even a percentage return by month etc is just a fools game anyway. Take what the market gives you, if you can take out 50% of a movement, be it a breakout or reversion to a mean, then be very happy about that and take your winnings and move on, don't try to hit a specific target, otherwise you're just going to wind up a loser. Your target is what the market does, and 50% of that even...
  • #36
  • Nov 20, 2010 11:42am Nov 20, 2010 11:42am
pips AND percentage are important. either one alone is only half the story!

do i want to make :

a) 1 pip and have a 10% account increase?

or do i want to make :

b) 100 pips and have a 1% account increase?

personally, neither. the first one is throwing money into a gamble if 1 pip makes such an account difference. the second one is carving out a really nice piece of market movement but not really doing anything to the balance at the end of the day.

if you can only talk about pips or percentage, then i'd rather know all about the pips anyday over percentage. i'd rather know someone can carve-out of the market a serious amount of positive movement as this confirms they have the ability to trade. i don't care what percentage or $ amount this gives them.

the market moves in pips. it doesn't move in $ or %. i want me some dirty stinking pips... the rest will work itself out for the most-part.
Congratulations ScalaFX for coming out of the closet!
  • #37
  • Nov 20, 2010 11:49am Nov 20, 2010 11:49am
It's possible.

I.e. if you can identify banks and market makers working big orders and get behind their intentions. A risk reward of 1:2 would be advisable.

But when the volatility dries up you should aim with less leverage for more pips or stay out completely.

For that kind of trading you really have to be very good.
  • #38
  • Nov 20, 2010 12:15pm Nov 20, 2010 12:15pm
Quoting nubcake
if you can only talk about pips or percentage, then i'd rather know all about the pips anyday over percentage. i'd rather know someone can carve-out of the market a serious amount of positive movement as this confirms they have the ability to trade. i don't care what percentage or $ amount this gives them.

the market moves in pips. it doesn't move in $ or %. i want me some dirty stinking pips... the rest will work itself out for the most-part.
I've stayed away from the arguments about pips or percentages. I can calculate both with ease, but I also prefer to do it in pips... why? because just as Nubcake pointed out: "The market moves in pips. It doesn't move in $ or %."

To bad Nubcake, you posted it in the wrong thread but your point deserves my 2 thumbs up
  • #39
  • Nov 20, 2010 12:20pm Nov 20, 2010 12:20pm
Quoting CrucialPoint
I've stayed away from the arguments about pips or percentages. I can calculate both with ease, but I also prefer to do it in pips... why? because just as Nubcake pointed out: "The market moves in pips. It doesn't move in $ or %."

To bad Nubcake, you posted it in the wrong thread but your point deserves my 2 thumbs up
cp you are a poster i take notice of, so it's quite something to be quoted by you. thx!

it's 4am and i'm bleary, but how come this is the wrong thread, though?
Congratulations ScalaFX for coming out of the closet!
  • #40
  • Nov 20, 2010 12:32pm Nov 20, 2010 12:32pm
Quoting nubcake
it's 4am and i'm bleary, but how come this is the wrong thread, though?
Because there is a whole thread dedicated on the argument whether pips or percentages is the right way of calculating things. I don't recall anyone who pointed out the same opinion as what you pointed out. I have the same reasoning, but I couldn't be bothered.

Now, this thread is about capturing 10pips. That's why I said it is in the wrong thread, though you were responding back to a previous post. Your comments would have gone a long way in the thread about pips or %
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