i’ve been surfing this site and forum for the past couple of days. i’m a newbie, but i can say i know a thing or 2 about investing and money management. (due to long hours playing poker and reading trading books. yes, poker helps a lot, it teaches you money management and self-discipline like nothing else:) )
in you trading systems section of the forum there are many threads like 40-100 pips a day trading system. now i know these systems are designed by guys who have been doing this for a long time (my regards to them, keep up the good work), but (and please correct me if i’m wrong) averaging 50 pips a day on a 1% margin means you average 500$ a day. now as i see it these systems should produce profits over a long term.
the question is, with what starting bankroll do these systems work? i’ve talked to someone that said you only needed about 10 000 $ or so (using then a maximum of 3% of your 10k per trade). but if that is true, then averaging 500$ a day (50 pips) would mean you have a growth of 15 000$ a month, that’s 150% a month. and that is too much.
where am i wrong? what am i missing? are these systems not meant to work on a long term basis?
no offece, but if i could design a system that averages so much as 15-20% per month on a long term basis i would get extremely rich… so what’s the deal?
thanks and please respond, as i am really curious.
and hats off to the guys who share systems and tehniques, i hope we can all learn from them and become good traders.
yep. i agree with you. my goal is usually 150 pips/month which i consider a success. some months i do better, others i end up negative…but its consistent returns that im after over the long term.
i had posted before that if you were to get 100 pips/day, your account would be larger than the gdp of some smaller countries.
im also curious to see if people are actually making 100 pips/day. no offense as well.
Margin doesn’t dictate your positions size or profits. A 1% margin means nothing without knowing the size of the account, so you can’t assume $10/pip. You would have to trade a 100,000 EUR/USD position to get $10/pip. Whether someone trades a $10k account with positions that size would depend on the risk involved.
yes, you are right. no way will you trade a 10$ / pip on a 10k account. i think you should trade mini lots of 10k, and that’s 1$ per pip. in this case it means 50$ a day. it’s not bad.
but exactly how risky will it be to trade standard lots on a 10k account? let’s assume you day trade using a system similar to james’ 45pip a day EURUSD. that means you will use 10% of you account on a trade (1000$ for 100k that’s a standard lot i think). has someone tested it over a longer period of time to get an idea of the variance it implies?