I have been doing a few trades today taking advantage of engulfing candles as i am starting to work on my own strategy and i tend to make 2-3% on most of the trades, is this a waste of time? should i be looking at methods to gain 20%! instead? or should i keep doing what i am doing?
The question you should be asking is rather how much are you risking to make your 2%-3%…then you can come up with a smart answer.
Couldnt agree more mate, on past trades i use risk 20% to gain 20%, same with this really. If i am only wanting to gain 2% i will only risk 2% but i feel as though that margin is far to small as the market can shift all over the place. Maybe 5% would be more realistic even though double figures are alot more attractive
Hi ForexNewbie,
I am also new to this, would you mind sharing your strategy with me? I am risking small amounts as well, and would love to see consistent 2% gains.
You really don’t want to be looking at risking any more than 2-3% per trade, and you can still hit your double figure return from a 3% risk. From what you have just said you seem to use a Risk:Return of 1:1, so use your 2% per trade, look for greater than 1:1 set-ups and your on your way. in my view, anything less than 1:1 RR is a waste of time, and usually if compounded this will result in a losing account. Try and look for trades that will always pay out more than your initial risk…
Im working on something at the moment but if its consistent over this next week i will create a thread on the systems section. To much detail to explain in one post sorry.
You can tell that traders are a spoiled group when they ask if 3% is a good gain :18:
If you can consistantly make 3%/month then I know a few millionairs who would love to be your bank 
It’s good to gain 2-3 % on a few trades. But you will never get big profits if you continue to trade like this. Take a risk of 20 or 30 % and gain it. Put some strategy like PT and SL in practice.
High risk High return
Please don’t comment on posts with no solid reasoning. Saying that you will never gain big profits by making 2-3% from winning trades is complete and utter rubbish as its very best. Try compounding per trade 2% gain off 10 trades per month, for just two years.
For simplicity we will look at this using compounding at the month end of each month.
2% x 10 trades = 20% per month.
Starting balance of $2,000.00
2 years later (24 months with compounding of returns)
= $160,000
So we have gone from $2K to $160K in two years based on the assumption that we only make 2% per trade over 10 trades in a month. Forget the netting off of losers to winners as this a pure text book example.
The Lesson here is that 2-3% is MORE THAN ENOUGH…[B]STOP BEING GREEDY[/B]
Im not to sure if you will agree on this but id say making $158K in two years, which is $79K per year, is far in excess of the average yearly salary in any profession.
I can’t see any way that risking 30% per trade is a good idea.
A 2% return per trade can make a lot of money, indeed a 5% overall return per month will add up to a lot of cash surprisingly quickly on any sensible account size.
I apologise in advance for being blunt… but anyone who advocates 20-30% of bal trades, does nothing other than announce from the roof tops ‘newbie’ and really should go through the BP school on Money Management! :23:
Dude, if it was completely consistent, I would be more than happy making 1/2% on a trade. If I could keep those profits, then after my account grew over a few years I could easily live off of that.
Personally, if I had a choice between a guaranteed consistent 0.5% gain and a risky 20% trade, I’ll choose the more secure one every time.
Sometimes you have to choose between greed and wisdom.
2-3% profit is a good amount of profit and risk to make on each trade. Before i started trading (althou im still in demo) i read a lot of books about trading and in all of them 2% to 3% risk is the amount of risk recomended when talking to other more experienced traders they almost always recomend a maximum of 3% risk.
Think about this, every one goes throu loosing streeks if you risk 20% of your acount in every trade and loose three trades in row you will loose 60% of your account and thats not fun.