20 pips a day is all you need! See what I mean..

shakespeare515 said:
One of the most valuable things that an online forex trading course can show you is how valuable 20 pips a day is..

1 standard lot at 20 pips/day = $200/day = $50k/year
2 standard lots 20 pips/day = $400/day =$100k/year
3 standard lots 20 pips/day = $600/day = $150k/year
5 standard lots 20 pips/day = $1000/day =$250k/year
10 standard lots 20 pips/day = $2000/day = $500k/year

If you were obeying 2% risk management, then you can multiply your account about 5 times a year.. at 4% risk management, you can multiply your account roughly 10 times /year. To demonstrate..

If you have a $10k trading account and you are trading at a 2% risk, then you can risk $200 per trade (2% of 10k = 200). that means you can trade 1 lot with a 20 pip stop and 20 pip target (1:1 risk reward, least acceptable).
If you can make 20 pips/day on avg with that 1 lot you will make 200/day=1000/wk=50k/year..

So, you just made a $50k/year income with just a $10k account!! only risking 2%. Most traders dont appreciate the leverage we get, and risk way too much, only blowing their accounts before they know what went wrong!

At a less conservative 4% risk management level, you could risk $400 per $10k. Using the same 20 pip model, we would trade 2 lots with 20 pip stop and target. 20 pips/day would now equal $400/day=$2000/week=$100k/year. So, a $100k income was achieved with a $10k account, using the same 20 pips/day strategy.

What's important is that we never need to try for more pips/day, thats too difficult and novice forex traders have a hard time realizing this. It is more beneficial to be consistent at a small number of daily pips and then gradually increase your lot size as your account grows.

btw, this is NOT compounding, this is taking your profits out every week. If you were to leave the money in your account and increase your lot size according to your account balance you would see astronomical gains.
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Who's that young girl you've got there, it's not Madeleine McCann is it!?

Anyway, what kind of a madman goes for/expects exactly 20 pips/day?
 
On monday, I vow to make exactly 21 pips. If I go over, I'll lose my trades until I get there.
 
It is always easy to say how we can double or triple our accounts, but the reality is different. It is not like this, start trading get 20 pips turn off computer and go away. We should have skills to find good opportunity to get those 20 pips with low risk. So we must have system. I do not know the system which can give 20 pips per day. If you know tell me
 
20 pips is not hard to get daily, but it becomes a point of rhetoric when no sound trading methodology backs it up.
What you mentioned is very accurate.


Soondoock said:
It is always easy to say how we can double or triple our accounts, but the reality is different. It is not like this, start trading get 20 pips turn off computer and go away. We should have skills to find good opportunity to get those 20 pips with low risk. So we must have system. I do not know the system which can give 20 pips per day. If you know tell me
Click to expand...
 
Soondoock said:
It is always easy to say how we can double or triple our accounts, but the reality is different. It is not like this, start trading get 20 pips turn off computer and go away. We should have skills to find good opportunity to get those 20 pips with low risk. So we must have system. I do not know the system which can give 20 pips per day. If you know tell me
Click to expand...

Right, if a system works over the long haul, you should want to take all the signals it offers. And if you have to strive for a certain amount and quit, it sounds like you're taking pips before targets and letting your losses run, which is what everyone who loses money does, plain and simple. Why do people keep doing it? Just get it in your head, if you do that, you're going to lose. You're going to lose. You're going to lose. Only experts can freehand trade, and usually because they understand this concept through many painful lessons.

I do believe there are ways to do risky manuevers and cut profits from your account before you lose it all and make huge profit doing so, but my kahuna's are not big enough to try it, and I don't really know how just yet. I'm just an observer of things like that, which keeps me satisfied
 
Lbranjord, admin can only do so much. I report them everytime I see it.
BTW, I got some fast moving stocks for you. Interested? (Just joking.)


lbranjord said:
This is getting old. Admins, you've got your work cut out for you with these folks, they never quit!
Click to expand...
 
20 pips a day is not a good strategy. Lets asume it is the type of market in which you can get 20 pips easily one can not limit yourself too it. Some days the market offers more and you better be ready to capitalize on such times cause often the market trades choppy and difficult and you may not be able to get them 20 pips and even end up loosing more than planned. A while back i tried this set target for the day thing and found that i often got just within reach of my target with a trade and then it puts pressure on me to do another little scalp to make the target for the day. That little scalp then goes wrong and bang you are in the clutches of revenge trading. My advise is to study your paticular market moves and price action, check sentiment out there and play it accordingly. It just takes a whole lot of screen time.
 
kimo'sabby said:
I'm with you on this. I'm going to set up a 1:1 bracket program that auto doubles my size until i hit 20 pips profit.
Click to expand...

and how many times will youdouble up?why not icrease by 50% each time and then reduce,it would be much safer and more profitable in the long run.
 
Wow! I go out of town for a week and a half, I come back and this thread has sparked some great conversation.. Kudos!! That's what these boards are all about right?

Anyway, let me try to sort out my original intent with this post..

The problem I have noticed with many traders today is they come into forex thinking it's all about how many pips you made today.

Once a trader wins, he wants to keep winning, so he keeps trading.. in fact most traders dont stop after a winning trade, many dont stop after a losing trade either, because they want to "make back" that recent loss. Sometimes in the attempt to "make it back," they lose again.. and then only quit when there account has reached such a low point , they are sick to their stomach and "forced" to stop trading...

Just like any successful business it is important to have goals.. targets if you will. These are NOT mandatory targets, but gguidelines.. Your goal does not have to be "20 pips" it can be whatever your strategy can consistenly achieve.. cuz that's what it's all about....consistency.

I like 20pips because I am a scalper and I can get 20 (give or take a few) about 4 out of 5 days/week. and it is easier to get 20 then it is to get 40 (you got to get 20 twice).

These types of goals also help with your discipline because they give you clear target areas to stop trading, taking an element of emotion out of the trade.(every little bit helps!) If you close a trade and you are up +23 on the session, you stop. How many times have you had a great day trading, only to take that last trade that brought you back to break even or even negative.

the original post in this thread also is meant to show you the "true longterm power" of small amounts of pips accumulated daily.. many traders make 20, then they dont think that is enough, they want 40, or 60... but the question is can you do this consistently 70-80% of the time, if you cant, then you are gonna have many 20 and 30 pip days that you throw away going for more..

Put it this way, if you knew, after practicing, you could make only 5 pips 100% of the time, why go for more pips? just put 100 lots on every day! Now, I personally dont think getting consistent at 5 pips is worthwhile because of the poor risk reward ratio you would need to endure, but II think 20 is much more reasonable. (If you have a strategy that can do it..)

I hope this inspires more dialogue..

good trades,
sam
 
I personally dont think getting consistent at 5 pips is worthwhile because of the poor risk reward ratio you would need to endure, but II think 20 is much more reasonable
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Going for 20 pips is just as poor a risk/reward as 5. Unless you have perfect entries every time you will be whipped sawed witha anything less than a 20 point stop loss
 
kimo'sabby said:
Who's that young girl you've got there, it's not Madeleine McCann is it!?

Anyway, what kind of a madman goes for/expects exactly 20 pips/day?
Click to expand...

That is my daughter kimo.. she's gonna be the youngest forex trader to make a million.. (y)

not sure what kind of madman goes for EXACTLY 20 pips/day..

That was never said.. it is intended to be used as a guide.. If you have +17 and your strategy is not providing any more entry signals then you stop... that makes sense, right?

sam
 
gamma said:
Going for 20 pips is just as poor a risk/reward as 5. Unless you have perfect entries every time you will be whipped sawed witha anything less than a 20 point stop loss
Click to expand...

you are definately entitled to that opinion gamma, but I have been trading this way successfully for several years.. I also use multi- timeframe fibonacci grids, that are highly accurate at predicting bounce points.. a necessity for scalping.. do you think scalping is not a valid style of forex trading?

and you do not need perfect entries EVERY time (that is impossible) just within 10 pips of the bounce point 70% of the time..
 
Soondoock said:
It is always easy to say how we can double or triple our accounts, but the reality is different. It is not like this, start trading get 20 pips turn off computer and go away. We should have skills to find good opportunity to get those 20 pips with low risk. So we must have system. I do not know the system which can give 20 pips per day. If you know tell me
Click to expand...

I do Soondock, but just know.. no system is going to "give you" anything. But the tool I use is very accurate and I achieve 20 pips about 70% of the time, and I do it in front of 200 other pro forex traders every day. I also trade in front of a live webcam that you and anyone else can come and trade with me.

here is the thread with the information...
http://www.trade2win.com/boards/forex-discussion/96786-live-forex-traderoom-webcam.html
 
lbranjord said:
Right, if a system works over the long haul, you should want to take all the signals it offers. And if you have to strive for a certain amount and quit, it sounds like you're taking pips before targets and letting your losses run, which is what everyone who loses money does, plain and simple. Why do people keep doing it? Just get it in your head, if you do that, you're going to lose. You're going to lose. You're going to lose. Only experts can freehand trade, and usually because they understand this concept through many painful lessons.

I do believe there are ways to do risky manuevers and cut profits from your account before you lose it all and make huge profit doing so, but my kahuna's are not big enough to try it, and I don't really know how just yet. I'm just an observer of things like that, which keeps me satisfied
Click to expand...

noone said anything about letting losses run... you can still only risk a certain percentage of your account per day..

also, you let your trades play out.. if you have one trade that nets +15, then you take a second trade, you dont close out at +5... if that trade has a planned target of +15, you let it hit its target...if that trade wins, you are now +30, now that you are flat, you do not OPEN any new trades, because you are over 20 pips...

sorry I gues I wasnt clear in the first post.. this is a guide to show you how little amounts consistently have a great longterm impact.. if you understand this, yiou can make your own money management rules, just make sure you have them..
 
gamma said:
only place 1 trade a day,This makes the actual trade worthwhile and you can cope with the losing ones, which we will always have. I did well all week until today when I took a loss hence turned off the charts and have spent the rest of the day on T2W as its raining outside.
Click to expand...

I really don't like this 1 trade a day concept that's taught to wannabe traders. I can cherry pick a trade that i 'think should' bounce or breakout with all the possible conditions in my favour, however what this ignores is the element of 'luck' every trader needs for each individual trade to work. Yes, 'luck'. What happens if you get unlucky on an individual trade, but then an equally good one pops up the next hour, you have to sit it out because you've done your one trade for the day and had a bad break, consequently missing the huge move later on??

The only advantage i can see is for the extremely undisciplined of novice traders who are trigger happy. But other than this one +ve, this concept will lead you down a road of disappointment when reality doesn't match your perception, i.e. you lose when you've just spent 3 hours trying to pick the 'perfect' trade. No one knows what will happen over 1 trade, but if you've got a statistical edge and discipline to execute without fail, then over a 100 trades you should fare better. But this means catching moves and no one knows when they're going to happen, therefore you have to take each one which match your entry criteria, not just one.
 
ian23 said:
20 pips a day is not a good strategy. Lets asume it is the type of market in which you can get 20 pips easily one can not limit yourself too it. Some days the market offers more and you better be ready to capitalize on such times cause often the market trades choppy and difficult and you may not be able to get them 20 pips and even end up loosing more than planned. A while back i tried this set target for the day thing and found that i often got just within reach of my target with a trade and then it puts pressure on me to do another little scalp to make the target for the day. That little scalp then goes wrong and bang you are in the clutches of revenge trading. My advise is to study your paticular market moves and price action, check sentiment out there and play it accordingly. It just takes a whole lot of screen time.
Click to expand...

Ian,
of course the market has different "moods" everyday. As a trader, you have to learn when to trade and when to stay out.
If you are just short of your daily target, and you feel pressure to open a new trade "just to make your target".. and you go ahead and enter it, without a sound reason other than making your target, then that is a problem with your discipline, not the 20 pips guideline. If you cant check your emotions your dead in the water, if not now then later.

if you dont like 20 per day, how about 100 per week, does that help take the pressure off of haveing to trade every day...

I must reiterate.. having goals is a good thing.. in business it is a necessary thing. If you come short of your target that week, thats ok. If you force another trade, then you have other problems in tyour trading you need to work out.

Sam.

P.S. sorry about the consecutive posts...
 
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