Consistency...let's talk

Hi everyone.

We need to talk. About consistency. If you don’t know it by now, I’ll tell you. FOR THE LONG HAUL, being consistent is the key. But, all things considered, protecting your capital is the utmost of importance. Then comes being consistent. So, I got to thinking. Let’s boil that down. The question I pose to everyone is this…
What is your consistent (pip or %) daily avg? I know we all are on different time schedules. Some work on the shorter times, and others work on little longer times. Like “weekly goals, monthly goals, or even daily goals”. But, no matter what time we are concentrating on, it can all be boiled down to a daily avg. I prefer to think of pips rather than % of acct. So I will be talking about pips now. What is my consistent pip value boiled down to a day? Is it one pip a day? I used to think that that should be so easy to attain. I’m sure if you ask a newbie can you be consistent with just making one pip a day, surely they would say yes no problem. And would be wanting to make that figure much more higher. See, I truly believe there is a big gulf between what we might think we can make, to what actually we make. If it is true that one can actually make one pip a day (BOILED DOWN), then why not put in a position size that’s really high, say 50% of your account? I’ve read much, and those elders out there say that pretty much within the first few years of being in the market, just to break even would be par. So, that means the pip consistent value boiled down to a day would be zero. Ok, so then a minus 1 pip a day wouldn’t be so bad. I think everyone (who keeps records) should know what that figure is. In fact, regardless of who you are that number is there.
So, my point is…
I’m gonna concentrate on finding out what my “boiled down consistent pip figure” is. I wish I would’ve kept track of that from the beginning. But, it’s so humbling to find out that I consistently make minus many many pips for a day. But…to make just one pip a day??? (actually) is really hard. Cause if I knew that if I could do that, without fail, then I would compound my position sizes.( And that is plus the spread also.) Like betting 50% of my account. Now, this all seems good, given if I was a scalper. But, I am not.
I would love to hear from you veterans out there. What is your consistent daily pip count? I know, you’ll probably tell me a percentage of your account that you attain. But, I would love to know what is considered really good. 10 pips a day turns out to be about 200 pips every month. I know, some months are better than others. And I also know that we know we will lose. “Let your winners run, cut short your losers”. But still, there has to be somewhere a boiled down avg per day.
And I do understand that counting pips has to do with being right more than being wrong, on trades. Which is a losing battle. But, I want to be right moreso, than accumulating an account.

Talk to me.
Set me straight.

Mike

Pips are a meaningless gauge of ROI.
Trader A can pull down 500 pips in a month, which may be 3% ROI.
Trader B can pull down 50 pips in a month, which may be 30% ROI.

The idea of “making one pip per day” baffles me- never really heard this notion brought up before?
Most newer traders need to be trading with a stop loss.
To scalp 1pip, you need to be trading a fast time frame.
The lower the timeframe, the more breathing room your stop needs.
You’d need @ least a 5 pip stop.
You cannot be successful risking 5 pips to make 1. It’s not possible mathematically.

My advise to all new folks has always been stop worrying about the returns, and mindspeak like “well, if I can make 5 pips a day, and there are 20 trading days in a month, that’s 100 pips. And if I average 100 pips a month that’s 1200 a year, if I trade only 1 mini lot that’s 1200$ / year.”

No, no, no no and no.
That’s not how it works.

Instead, I recommend focusing on the process, not the results.
It’s important to have goals, and to keep your process in check, but, the priority needs to be placed on the process, not how many pips you can make in a day.

When people think like that, they’re setting themselves up for failure because it’s not easy to make x pips/day consistently. If you’re holding yourself to some arbitrary goal, and your not accomplishing it, you will get emotional and start to over trade to try and compensate for your inability to reach your profit goals.

Rather, why not just trade whatever the market gives you based on your strategy. Some months you can clean house with a 25% return, others, you only pull in a few or lose a point or two.

One of the main killers of retail accounts is overtrading. Setting a goal such as x pips / day without a proven strategy (at least 6 months live trading history, drawdown < 15%, clean risk of ruin table, solid sharpe ratio, avg win > avg loss) is dangerous in my opinion.

Thanks.
Good stuff to maul over.

Ok…but…goals…???
What is more important, a financial goal (starting from the ground up), or a strategy.
Cause I think a strategy should be picked for the purpose of your goal.

Which one comes FIRST??

Strategy always comes first.
Every single trader shares the same common goal- make money.
Why not set non-monetary related goals? How about ones like:

-Read 5 trading related books a month
-Journal every single trade you make (before, during and after)
-Try to run a 9 minute mile or exercise more
-Try to meditate for 15 straight minutes, completely clearing your mind of any inner noise
-Develop a routine for trading (you don’t just roll out of bed and fire up your charts)

All of these will help you attain your goal.

I don’t live without goals. Especially in a business.
Look, I’m not saying I will achieve x amount of pips or dollars in a certain time span. I know this a beast of a market. I’m just wanting to know what I can achieve. Hey, if it’s nothing but break even for the next year, then so be it. But, I want to get better and better. Therefore I must know where I’m at now. And watch where I go. I am a stat nut. I love keeping track of numbers. That gets out of hand for me at times, moreso than trading. And I do keep track of every little detail of what I trade, before during and after.
But, my main point is that this is a business. I must keep track of where I am now, what happens, and where I am gonna go. And all that requires goals! I will adjust a strategy to conform to a goal, rather than base my business on a particular strategy. And don’t forget, I’m at the bottom now. That still requires some kind of goal albeit a very very small return. And consistency!
I’ll never ever live without goals. I shoot for that.
The problem is finding a realistic goal.
That’s my aim. And will find the strategy to accomplish THAT.

Mike

Exactly- you don’t know what you’re capable of doing until you do it.
Shoot for the stars, and in 6 months from now you’ll have a good idea of what is “realistic” simply by looking @ your trading history.

Hey Mike,

For me (again, personal opinion), I focus on my R-multiple return. If I make 200 pips, but risked 100 pips stop loss, I made 2R (or 200%). But if I made 12 pips on a trade and only risked 3 pips, I’ve made 400% or 4R. Pip count is irrelevant (imo).