Just curious if trying to hit 20 pips a day is well on the tame side cos i suppose of you of guys make like wow on average 50 a day or even higher.
Better to forget the pips, and focus on the percentage gains you make per week. It’s hard to handicap what a 20 pip gain means in real world terms for each trader with different circumstances.
If you made 3% on a $5,000 account, and another trader made 2% on a $50,000 account trading the same pair, it is easy to measure that you outperformed by 1%.
Totally agree, the sooner you can forget about measuring success in terms of pips the better. A 20 pip gain to one trader may be 0.5% or 3% (just for example sake). It depends on the capital value per pip that you are risking etc.
I can also tell you that not many traders will be making 50 pips a day every day… it’s just not possible. This is why it’s imperative in most instances to have the potential gain exceeding the potential loss of the trade in question. This way even a 50% win rate will result in gains over the long run.
Thanks guys both of you make sense now to fine tune the account growing process.
Let us assume you aim to make 3% on say a 5k account by the end of the month. One of the weeks you make 1k now that is alot for a 5k and it’s definitely higher than the 3% target you set earlier so should u now aim to change it originally from 3% of 5k to now 3% of 6k and if let’s say you lost 2k the following week would you now aim it to 3% of 4k instead?
I think it’s better to set the percentage to how your account grows or falls rather than to set the percentage to what your account amount was at a certain point in time.
Exactly, it’s called compounding up/down. If you always risk 1% of your account balance per trade then do this all the time, regardless of the account balance changing over time.
let’s think about it this way. Start with a 10k account. Let’s say you want to make 20% so the target is 2k end of the month.
so during the month your account has more than 2k and sometimes less than 2k and you end up making 1.5k so you didn’t hit the target of 20% but 15% being in the green is still better.
So next month you decide to hit 20% of your increased account size so it isn’t 10k anymore but 11500 and the new target is 2.3k so there comes a time when you would need to increase lot size of increase your TP to hit the percentage wouldn’t you?
On theory it really sounds swell but it sounds kind of risky doesn’t it?
Then it would suck if you lose money suppose you lost 2k instead so your account has 8k so 20% of that amount would be 1600 it wouldn’t make back your original amount of 10k.
I would honestly stay far away from targets, they set you up for inappropriate negative feelings. Focus instead on behavior.
“Did I trade that correctly according to my trading plan?” If so +1 win or lose. (Don’t forget a 90% win rate loses 10 times out of 100!)
If you dwell on money amounts or targets you will expect and spend in your mind 20% then feel like a idiot when you “only” make 18%. Take the money the market makes available to you…focus on correct trading behavior, manage risk and your profits will take care of themselves.
And listen to Jezzode above, if you keep risk constant as a percentage, your money risk will dynamically adjust to your gains or losses over time.
I think making 20 pips in a day is good if we have good knowledge and experience in Forex.
i think what’s more important is consistency… whether you rack in a fixed amount of pips per day or whether you have a consistent win rate with a positive expectancy.
I like this approach by 3DApex. I do think a target is good though… Goals are always helpful, make it hard to reach but not impossible. That way, you’ll be motivated.
I think most people are wired to concentrate on “results” as opposed to the “process”. Thats what makes setting daily targets so enticing - it helps you track progress. Although I do like your idea of giving yourself a score after every trade. That could be an interesting way to grade yourself and see if you’re trading properly.
Reminds me of a blog post that Dr. Pipslow did a while back… this might help Focus on the Process, Not on the Profit | Forex Blog: Pipsychology
Focusing on going positive every single day can be pretty toxic, IMO. Not every day will be the same and you’ll find that more often than not, you won’t have great trading opportunities and you would be better off sitting on your hands.
But let’s say 100 pips/week is reasonable (so your 20 pips/day* 5 trading days in the week)
However, given the variation in market conditions and how it aligns with your trading approach, your trading looks like this at the end of each day:
Monday: -27 pips
Tuesday: +56 pips
Wednesday: +3 pips
Thursday: +70 pips
Friday: -6 pips
Weekly total: 96 pips
So that’d be a great week! right on target, good gains. Everything is going well. Now if you expected the market to give you this kind of week, then you’re all set. However, if you were expecting your sexy, even, consistent 20 pips per day, this is what would actually happen
[B]Monday:[/B] [U]a few trades get you down -27 pips[/U]
“Crap…still gotta make more than 40 pips to meet my target… I can only take bigger trades now…but my system isn’t meant for bigger trades…well if I can just pull out two more good trades here I’ll be where I need to be. But it’s getting late in the day…oh well I really need those pips.” And then you force more trades. And those trades are terrible. And you know in your mind the whole time that they’re going to be terrible. 
Chances are now you’re down more like -40 pips by the end of the day.
[B]Tuesday:[/B] “Okay, lost 40 yesterday, but today will be good!” and let’s assume you get those same +56 pips. “Well I’m still just barely away from my goal (10-15 pips positive for the day), gotta wait for one more good trade to get my 20 pips for the day and I’ll be set… crap getting anxious on not wanting to miss my opportunity. I’m SO CLOSE to getting a nice positive day. Okay boom! take that trade! Ahhhh I’m losing…I knew better. I knew I shouldn’t have taken it. Grrrrrr. Okay I’m breakeven now for today, so just gonna end today”
[B]Wednesday:[/B] “alright let’s do this.” after a few trades, +3 pips on the day… “okay one or two more trades and I’m set. crap! I lost this one…down 10 pips now…well I wanna make my pips but I should be careful because I got reckless before so I’ll just wait till tomorrow.”
[B]Thursday: [/B]“okay feeling calm and in control today.” And let’s say you make that +70 pips this day… “man I’m feeling awesome! Hey that trade looks decent…not the best one but it looks decent… And hey, I’m up 70 pips anyway, I have an extra 50 pips I can work with since I only need 20 pips per day.” Take a few trades, losing more because they weren’t very good trades. Down to only +40 now “well I’m still good for the day, just gonna stop here.”
[B]Friday:[/B] “okay today is my last day this week to do really good!” -6 pips “Ahhh I don’t wanna end the week bad…don’t wanna miss my opportunities before the weekend!” then -25 pips later… “crap I’m so pissed off. Whatever. I’ll just end this week, forget it happened, and start fresh next week.”
Now let’s look at your week:
Monday -40
Tuesday +0
Wednesday -10
Thursday +40
Friday -25
Which leaves you -35 pips.
The point is very simple: any good trader will tell you how much your own personal psychology matters. It’s one of THE most important parts of trading. Setting those consistent daily expectations will most likely just mess with your head even MORE (and it’s hard enough WITHOUT that there in the first place)… So don’t get wrapped up on it.
Enjoy the process, reward yourself for following your plan (like 3DApex said), and just be curious to find out how well you did AFTER the week is over (and markets are closed so you can’t take trades :P).
Hope this helps
Agree with 3DApex and Jezzode. Focus on your percentages more rather than the pips. Wishing you a very good trading day ahead, my friend!
Forget the pips and percentages and measure in money (whatever your monetary unit is, dollars, euros whatever) or measure in number of R eg -1R, 2R 5R etc.
Wouldn’t measuring in R just be like measuring in %s? I presume R = a certain percentage of your account…
R is the number of risk or reward. One should only be risking -1R to make 2R this 2 to 1 eg risked $1 to make $2.
I understand that sone ppl don’t like to judge in pips but I find it useful
If you say you made 20 risking 1% of your account . It give more detail and other can refer to there own account
So some one else could say , oh I like to risk 2% so I can open double the lot size
Some saying I made 5% of my account
What did you do
You could of risk 100 lots and made 1 pip and have a 5 pip stop lost
Or maybe you open 1 trade and left it open for a year
If you have a weekly target of "x"
Some one can use the same multiple for there own account
Eg . My target is 100 pip a month
I could make that in 1 trade or 10 small trade
You could turn that around and say your trading x1 or x2 lots then you only need to make 50 pips but your increasing the risk
You then can say
account balance of $1,000
Target 2% $20
How are you going to make that $20
Well you need to make 200 pips trading 0.01 lot … 100 pip trading 0.02 … So on
The above comments are saying
If you have a car . Your low on fuel …
When the light start flashing do you say ?
"i have 2% of my fuel tank left "
No … You say " crap I have to fill up in with in the next 10 km"
When some one list a trade .
They are saying open at "abc"
Take profit at “x” pips and stop lost at “z” pips
Or they say take profit at “x” price and stop lost at “z” price
It sound stupid to say
Oh sell aud/usd risk 2% and take profit at 3%
What the hell … Do I open a huge account and close out 1 pip … Where do I place the stop lost , when is the trending going to end
Your welcome to trade any way you want . I am sure your going to get ppl to trade THEIR way
All the best
One should always define their stop loss (risk) before take profit.
[QUOTE=“tom82;523935”]
One should always define their stop loss (risk) before take profit.[/QUOTE]
Very good point
I normal set up profit and stop lost same time .
Either by setting it to support line ( just in case it break )
So once I have my risk to reward work out … If it not 1:1 I won’t even bother opening
Eg if place stop lost . 100 pips I work out that I only want to risk eg 1% of my account . So if you have $5,000 I can lose $50 on this trade .,…
So I would I can open 0.05 lots
But of I had larger stop lost of 300 pips I would only open 0.01
Yes if a try to scalp - I would increase my trade
I normally trade long term .
Befor I even open any trade - I have already detriment my max lost in $dollar
It make it easier to sleep at night that the most I can lose is $50 in a night or weekend slippage or when I am on holidays for a week