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anyone here make 20 pips a day...

  • #21
  • May 22, 2011 6:40am May 22, 2011 6:40am
Quoting Adewumi
Risk can be predetermined, Reward is unpredictable. that is absolutely true

But

Let's see.......

Here is my line of thinking. My general understanding of a successful trader is one who Steadily or Gradually makes his/her account grow.

if he is to achieve that, he must first of all know that not all trades will be profitable which means that for everytrade he enters (TO MAKE PROFIT) he must reduce his/her risk so that he will not blow all the profits he has been making for a couple of days.

Is this not the reason why...
Of course that's why we're here. If we want to debate the minutia of the exact details why someone trades, I suppose we could. I would assume that yes, ultimately a trader would expect to desire to be on the Plus side for his efforts. I don't think that this really has to be re-established. What IS being said here is, to a rookie OR to anyone who needs to here it...

Manage yourself, (your behaviors)
Manage your expectations, (while somethings are possible on paper... are they truly probable?)
Manage your money. (Protect your inventory)

WHEN you can do those things successfully, THEN good things happen.
  • #22
  • May 22, 2011 8:25am May 22, 2011 8:25am
Quoting mongolian

manage yourself, (your behaviors)
manage your expectations, (while somethings are possible on paper... Are they truly probable?)
manage your money. (protect your inventory)

when you can do those things successfully, then good things happen.

you couldn't have said it any better
  • #23
  • May 22, 2011 8:25am May 22, 2011 8:25am
Quoting custos
yeah, i kind of agree. It's all about risk-adjusted returns.
But, since we are here in the rookie forum, it is important to make the rookies realize that your returns are only as good as your risk management. Shooting for insane returns with insane risk won't turn anybody into a professional. You need to focus more on the risk than on your profits, not the other way around. Then, if you also have a positive expectancy model, you will make money, if the risk to the downside is very controlled.
i totally agree with you
  • #24
  • May 22, 2011 11:13am May 22, 2011 11:13am
Quoting hanover
Exactly right. There are winning days, and losing days. You can't take more than the market is willing to give you. Even the best technical strategies can be upset occasionally by randomness.



Personally, I've found goal setting to be counter-productive. If you fall behind with your daily/weekly/monthly goal, you must either overtrade (take inferior quality setups), increase your risk, or simply acknowledge that the goal was unrealistic, and therefore worthless.

Still, each to their own.
If you don't set goals you will drift without confidence. The goal especially pip count must be realistic. Say your goal is 20 pips per day. 5 or 10 pips are more realistic if you manage your account margin to meet the 20 pip amount originally wanted. In short you can't take more than the market gives you but you can certainly keep what part of what the market offers you. Just define *take* reasonably and you will start winning regularly. Then keep adding in your profits to the margin and trade the allowable units the same way. Your account will grow. Don't let your stop losses be larger than pip profit need. Set stops and gains with buy/sell order. Remember you just want to compound $$$$. Take little pieces of the pie and eventually you'll own the bakery.
  • #25
  • May 22, 2011 1:40pm May 22, 2011 1:40pm
Quoting dforant1
If you don't set goals you will drift without confidence. The goal especially pip count must be realistic. Say your goal is 20 pips per day. 5 or 10 pips are more realistic if you manage your account margin...
If goal setting works for you, then great, I wish you continued success.
  • #26
  • May 22, 2011 2:28pm May 22, 2011 2:28pm
While I may be going starkly against conventional trading dogma, I can't help but include my opinion regarding two statements which I think deserve a thorough second-look.

The first inconsistency which I believe is perpetuated, is that of setting a goal to make a fixed amount of pips/points/ticks per trade. Fundamentally, this equates to one imposing their fixed, arbitrary values on the market, in the hopes that it will comply with it, granting them the desired smooth, non-decreasing equity curve.

While the merits of a fixed take profit take the form of a mechanical, emotional-free approach to trading, it is sorely lacking from a logical perspective.

Let's take the simple case that one has a fixed target of say 50 pips on EUR/USD, because throughout their sampling/backtesting, you have found this set up to optimally yield this amount.

A short trade is entered, and moves down to +35 pips. During the course of the trade, let's say an unexpected event occurs - S&P downgrades the U.S. by a notch for example. Is it logical to wait for your target to get hit, or assimilate this information, indicating that your trade is in risk, and that getting out now would net you a profit of say +10 pips accounting for slippage?

On the flipside with the same short trade, what would you do if new information came out that U.S. is going to increase interest rates at the next FOMC Meeting? Is it logical to take only 50 pips of what has the potential to be a 500+ pip move?

When you consider that your fixed targets, or Risk:Reward ratios are most times meaningless to the market, then it should direct one to seek ways of determining how to exit based on market-generated information. Although such exits cannot be systematically programmed, it is easy to see the merit and potential profitability they propose.

The second inconsistency I believe perpetuated is that there is an implicit need to risk between 1% and 3% per trade. I certainly advocate such money management for systems which are marginally profitable, in order to lengthen the survival period of the account, to at least be able to extract some profits. However the market does not always have to be a 50-50 situation, and in some instances the probabilities of success can be highly swung in one`s favour. Is it logical to risk the same amount on these higher probability trades? Risk should be a function of emotional tolerance and system expectancy - don`t treat it like a rigid take profit target, in that risking more than 3% is unwise, no matter the system.

As hanover said, if you are able to set fixed constraints on a dynamic entity, and this works for you - then if it isn`t broken, don`t fix it. You may have stumbled on to something, and I`m long passed the stage of naievety I was when I first began trading to say it is impossible.

Regards,
xXTrizzleXx
  • #27
  • May 22, 2011 4:41pm May 22, 2011 4:41pm
Quoting xXTrizzleXx
While I may be going starkly against conventional trading dogma, I can't help but include my opinion regarding two statements which I think deserve a thorough second-look.

The first inconsistency which I believe is perpetuated, is that of setting a goal to make a fixed amount of pips/points/ticks per trade. Fundamentally, this equates to one imposing their fixed, arbitrary values on the market, in the hopes that it will comply with it, granting them the desired smooth, non-decreasing equity curve.

While the merits of a fixed take profit take...
I won't divulge my method but there are many that could match it. I look for 10 pips total per day with 2 5 pip gains. EU only. 5 pip stop loss + spread. Usually a total of 6 with Oanda. Have to be careful around news time because Oanda plays games with the spreads. At times being down 4 trades I know I can trade out of it. The law of probabilities has not crossed me this year to date. I trade from 3am to 11am est., if necessary. Couple times went into the NY afternoon session. My average trading time is 2-3 hours. Many days out under half hour. Rough guestament. 5m time frame takes concentration. Take longs and shorts. Next is the power of compounding. More units each week but s/L and 5 pips with 10pips and out stays the same. That's why I know a quota can successful. Once one reaches it through compounding don't mess with it . Take it weekly. Don't be greedy. Without a goal I would hate to blow Mon tues and have to make it up on wed thur and fri. That's pressure. Truth be told I have gotten
out at +5 6 times. Hey I'm only human. This is daytrading. If one couldn't keep concentration then move onto something else.

The afternoon NY and the Asian 7pm markets aren't bad but London is Golden.
  • #28
  • May 22, 2011 10:21pm May 22, 2011 10:21pm
I think people are missing the point.

The question is not about the "pip" amount in itself but the money it represents.

Lets use the EUR/USD as a example. The pair moves linearly over 100 pips during London/NY. If you count the swings, it moves at least 2.5 as much, so harvesting 20 pip per session sounds very reasonable.

The problem is that you can't just go and catch 20 pips in a clean move every session. Usually you will have some winners, losers and some draw downs and the 20 pips will be the result of it. Some days you will end up in losses and other days you will be able to catch a good 50 or 100 pip move.

Now..... how will your psychological side respond to it?

I would say that if you are trading 1 or 5 or 10 bucks per pip your brain will respond well to it(depending of your account size of course) but as soon as you start puting real money on the table and trading lets say over 500 bucks per pip your emotions will start to become a challenge.

At 10,000.00 dollars per pip........how much draw down can you stomach? Would you still be able to respect your strategy?
Will you still be able to sit tight on a 50 pip profit without taking a premature profit?

10 grand per pip is a day by day stuff among institutional traders 100 grand is also quite usual.

So my point is how much money those 20 pips per day will signify and how you will handle the pressure as you watch your unrealized profit/loss fluctuate.

As a example.....try to put a piece of 2x4 on the floor of your living room and walk on it. Assuming you are sober thats pretty easy.

Now put the same 2x4 between 2 high rise buildings and try to walk on it with out a safety net below you. Suddenly the same task become trickier....right?

Technically the situations above are very very similar, same piece of wood same person same task to be accomplished.

What changed is the risk factor.

So now the 20 pips day paradigm can be something elementary or become rocket science. it all depends if we are talking about 10 cents or 100 thousand per pip.
  • #29
  • May 23, 2011 5:04am May 23, 2011 5:04am
Excellent topic because it's an important one. That's why compounding and taking time to grow a bankroll increasing gains weekly, monthly, whichever way one wants is safer. 10000 units is $10 per day at 10 pips per day, $50 per wk. At 15000 units per day and 10 pips its $15 per day or $75 per wk. Use any amount of $ to start and increase units weekly. This is assuming through demo trading one can make a profit no matter the size consistently. Otherwise donate to Charities instead of throwing it away. This is a rookie forum so unless one is getting an allowance from Mom start small with a net profitable method or system and grow it like corn. Grow it in June eat in August but you'll be eating regularly.

This is a rookie discussion one of which I am. Trading 7 months now. Did 3 years of stock trading. If it weren't for the Fed printing $$ it would be half it's size. That's a cooked game. I'm not preaching or educating. LOL that's why I'm in this forum along with others. Don't as me about my particular trading method. Many of these systems posted work. Sift through them. We don't have to be Einstein's and know all about Forex trading. Stay in your own little world with something that works for you. That's why I read the Rookie forum first. The others are loaded with braggers and disillusioned.

Read other rookie forums also. Many out there. Likely not kosher to name them here.
  • #30
  • May 23, 2011 5:19am May 23, 2011 5:19am
Quoting Platypus
I think people are missing the point.

The question is not about the "pip" amount in itself but the money it represents.

Lets use the EUR/USD as a example. The pair moves linearly over 100 pips during London/NY. If you count the swings, it moves at least 2.5 as much, so harvesting 20 pip per session sounds very reasonable.

The problem is that you can't just go and...
And the only way around that psychologically is to think in terms of percentages not amounts of $. If I had $100 and lost $1 thats 1% if I have $1,000,000 and lose $10,000 thats still 1% of my account I've lost. Risk to the account is exactly the same. Still the same amount of trades left before I'm wiped out.
  • #31
  • Last Post: May 23, 2011 5:56am May 23, 2011 5:56am
Quoting highlander2
MAking 20 pips in a day is not hard at all, but making 20 pips every day forever is.

You would need to be thinking about averaging 20 pips a day rather than just that figure.

the problem is no two days are the same, some days are a lot easier than others.

The other thing to remember is that if you start trading and lose 10 pips then 10 pips again, you now need 40 pips to make the goal.

You will have losing days and winning days, so to average 20 pips per day you will need to make more than this on winning days, perhaps 30-40 depending...
We can't always score a touchdown. A field goal may be necessary at times. If the goal is 100 pips per week don't fret over 20. If it's not capable of coming close take another approach. Above has 1 good idea and 1 bad one. Why perhaps make 30-40 pips to cover an average of 20. Folks have gone broke and mentally ill doing this. If your not sure of the 20 per day accept the loss and start a new day. That would net you 60 pips for 5 days. If you get 2 losing days you will net 20 pips for 5 days. If the account turns negative it obviously isn't working. Give it another week to amend itself. If not move on.

Trading up is a boiling pot of disaster. Of course it can be done but it requires lots of capital and nerve. How deep are your pockets?
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