Can i make 50$ a day?

Beginner Questions
101

I’m well aware there is far more money in trading longer term. My account is not large enough to weather the drawdowns of longer term trading yet, and still be within a reasonable risk %, while at the same time making a decent return.

What if you didn’t have to weather a large DD?? There are ways… I can tell you I use between 20-50pip SL and risk between 2-3% each trade… and NO big DDs…

Read “Master the Markets” by Tom Williams

Anyway, I was nice till you called me a moron, and then just continued this mostly for my own amusement…

So no hard feelings on my end thick head… cheers mate :wink:

102

No, no hard feelings and thank you for the book advice. I always like to find a GOOD book on trading as they are few and far between. I was amused too. Actually really nothing better to do today.

103

Hmmmmm.

Maybe a bit of reconcilliation coming up? :confused: :stuck_out_tongue:

In any case, a summary of the correct leverage/lots/pips/risk matters that came up in all these posts above would probably be useful. :smiley: :slight_smile:

104

Somone that was debating in this thread with us started a seperate thread, spurred by this one I believe. Think it was leverage demystified.

IMO, the babypips section on leverage, particularly the part where it says leverage CAN multiply wins and losses, though CORRECT is worded in way that is very easy to misundertand for someone new.

I’ve come accross at least a dozen posts where brand spanking new noobs came to the assumption that you manage risk through leverage. That is since they set their account to a low leverage ratio, they thought their account was at very low risk.

105

Risk should be managed by the trading strategy you use.

From this you set the [U]amount of pips[/U] you are prepared to risk.

Then calculate 2% of your total account - that becomes the [U]amount of [/U][U]money[/U] you are prepared to risk.

Then do a division to get [U]money risked/pip[/U].

You can then work out how many lots/minilots/microlots fit the bill.

You can then, as an academic exercise, calculate the [U]working leverage[/U] that you are using.

I have never found that [U]broker leverage[/U] (I use 100:1) to come into it.

Not unless you are going to play with margin calls!! :stuck_out_tongue: :stuck_out_tongue: :stuck_out_tongue:

So, in the end, I am not sure why you two are arguing - and that to the point of calling names.

Here is a much older thread that I think correctly and accurately answers all the matters that have been raised in this thread.
This thread was around when neither of you two were yet on this forum so it is definitely worth a read…

http://forums.babypips.com/newbie-island/1184-few-questions.html

106

No argument there.

107

[B]As I see it, there are 2 possible dangers with using excessive leverage.[/B]

Brokers love high leverage, that way, you have a greater risk of losing your money thro greed, and, of course, your lost money becomes the brokers money.

[B]1)[/B] [U]Broker leverage[/U] is like a water tank.
The bigger the tank, the more water you can put in it.

Now the higher the leverage, the more lots you will be inclined to stuff into your trade -why? - because you can - [U]and more lots means more profit.[/U]
[U]And, of course, more loss[/U] - hence the dangerous risk - even to the point of losing all your money.

The smart trader resists the temptation to pile on the lots at high leverage.

[B]2)[/B] Equity is the funds you have to trade.
Now with higher leverage, smaller margin deposits are needed, hence more equity left over.

That sounds good, but if your trade backfires, funds from your equity are “marked to market”, that is, equity funds are added to your margin to cover your trade as it goes wrong.

The margin call occurs when only an amount equivalent to [U]initial margin [/U]remains unused.

Initial margin for 100:1 leverage account = $1000/lot.
Initial margin for 400:1 leverage account = $250/lot.

Assuming the broker is ethical…
…and 1 lot only is traded…

at a margin call, trader 100:1 gets back $1000
and
trader 400:1 gets back $250.

[B]But it could be a lot worse for trader 400:1 because of reason 1 above.[/B]

…Because trader 400:1 can get 4 lots for the $1000 margin whereas trader 100:1 can only get 1 lot.

Should trader 400:1 choose 4 lots and the trade backfires he will lose 4 times the amount of money that trader 100:1 loses and that is long before a margin call.

Of course trader 400:1 could be wise and put up only 20 microlots.

But is that not really 2 minilots? :stuck_out_tongue: :stuck_out_tongue: :stuck_out_tongue:

108

lol im newb and i just read through the 11 pages. i only understood thepheonix his words were CLEAR, LOUD and easy to understand. but he was just abit aggressive.

i must say thePhoenix and sweetpip is the only one that is making senses and really know what their talking about.

he was only trying to get through few messages

  1. Leverage is a limitation to your CONTROL , not what decides your risk. Your lot size and S/L does. If you have master your own discipline then just maxed out ur leverage and trade with ur own discipline.

  2. If u dont have the skill, might as well dont trade. it doesnt matter how much ur trading. it only matters if u consistently win more than u lose. therefore sharpening your skill is more important. if u cant grow $250 , u cant grow $250000. eventually ull lose money if u suck

thats all, how hard was it for u guys to understand lol.

Thanks Thepheonix, i gained alot of knowledge and certainly understood leverage and lotsize after this 11 pages and i fully agree with ur philosophy

109

Would this be considered a normal day at Babypips for you guys? lol :eek:

Very interesting conversation. I’ve been trading live for two years now.

Before I went live I read right through the Babypips school, looking back now it was instrumental in my success as a trader.

I’ve been profitable for a little over ten months now and I couldn’t be happier

I’m so pleased :slight_smile:

I thought most of the people in here here made good points except for Phoenix, but thats just my personal opinion.

Very insightful posts from Tymen, I love they way he systematically and logically makes his points. You gotta love that.

Valid argument by CDawg.

I thought Daydreamer’s and Hess’s doctor analogy about there being a steep learning curve to trading profitably made sound sense.

Couldn’t see any logic in Phoenix’s posts :confused:, sorry

110

Phoenix is a relatively new trader who started out here as a beginner with lots of questions.

He has made truely amazing forward progress, and can now hold his own in a difficult issue.

I am sure, if he persists, he will become a gun trader and a future Honorary FX Member if he stays on this forum long enough.

111

Tymen I keep hearing you saying, “gun trader,” What does that term mean exactly?

112

What has being a “[I][B]Honorary FX member[/B][/I]” got to do with trading? I hope this title is not a prerequisite to be a good trader, because I am not even a newbee yet lol

As for Phoenix, dont know his past, but the guy has still lots of ground to cover judging from a few replies he made to my posts.

113

LOL, why is that punjabi? Because I pointed out that you are trying to manage your risk with your leverage?

114

Not quite sure why there is so much angst on this thread. You are arguing about slightly different concepts which essentially means you are all right! There is a difference between permitted leverage (as Phoenix says has no implications regarding your risk and is broker defined) and used leverage (which various others are referring to) which can kill you quick if you overdo it. But please guys, calm down. Its really not that important if someone doesnt want to take the time to listen and clarify whats being said

115

This is an interesting thread… though the original starter is probably long gone…

I’m not sure what the issues are about, since trading $1 on a $250 account is about the same as trading higher amounts on a $1k account… ?!

Although talking about “compounding” a $250 account into the thousands is the stuff that fantasies are made of. Let’s face it, in this game, almost everyone (who is honest) ends up blowing a few $1k or even $10k accounts… I know I have. It’s just part of the learning process, and no matter how well someone does with a $250 account, it will never be the same psychologically as playing with a $10k account.

In short, to the guy who started the thread… you can make $50 a day (averaged out), but not playing with a $100 account. But if someone succeeds, pls PM me in private with how :slight_smile:

116

Sorry, Australian idiom probably.

Gun trader means “absolutely expert trader” - the best you can get. :slight_smile: :slight_smile:

117

There are thousands of traders registered with this forum but only 6 of us at present…

Rhodytrader
Tonymand
RRRAM
Mytwopips
Daydreamer65
Tymen1

No, it is not a prerequisite to be a good trader but
being an Honorary FX member means we have been here a long time and we have weathered the storms of criticism and interacted with many other posters and threads.
We have all posted much useful material and we have had a chance to see some of the history of this forum and that gives us a better perspective.

In short, we know what is going on around the place…
and that makes us special… :smiley: :smiley:

As for Phoenix, dont know his past, but the guy has still lots of ground to cover judging from a few replies he made to my posts.

We all still have lots of ground to cover, especially me.

118

[B]As a fellow Honorary FX Member, I totally agree with Tonymand.[/B]

The Phoenix was approaching the problem of risk assessment thro the use of high leverage tactics to minimize risk.
The points made are valid.

Cdawg was approaching the problem of risk assessment thro a comparison of the dangers of high leverage vs low leverage.
The points made are valid.

[B]
Both are correct.[/B]
[B]So what’s the point of the squabble??[/B] :confused: :confused: :confused:

119

Actualy if ppl really take time to read and think, actually all the arguments in the past or present is really just a difference of concepts. [B]IF PPL[/B] really think about it, there is really no absolute right or wrong answers in trading. One exp trader, A can use his style of trading and find it profitable for him but it may be wrong in majority traders point of view. But this style of trading is really profitable for A. So if we have a difference point of view, we should really understand that it may fit A but do not fit ourselves, so we should just move on and find something that is right for us and stop arguing and proving that A is wrong. Now I know why in the past, all the masters only imparts their special skills to selected students behind closed doors and refused to reveal to the public as it will bring a lot of arguments whether their skills are right or wrong. :slight_smile:

120

To [B]Ray_1[/B]

I like your closing statement!! :slight_smile: :slight_smile: :slight_smile:

PRICE ACTION TRADING AND SR LEVELS ARE SIMPLE AND PROFITABLE :slight_smile: