I have been playing around in my demo account and I have a question. Is it wise to risk the same amount of PIPs as your TP? I risked 35 pips and set my target for 35 pips on a 30 mins chart. I actually gained the PIPs (YAY), but I could have lost the same amount of PIPs.
I only ask because when I set my stop loss at 20 pips I kept getting kicked out of the trade. My goal is to gain 50 pips a day so grow my account slowly. That is how I’d like to grow my live account as well.
@MiiMee
have you tried setting a take profit of 5 pips per trade and doing 10 trades a day
or
10 pips per trade and 5 trades a day instead of 1 trade of 50 pips
Hi mate welcome to the community. I would ask what type of trading you are doing and on what pairs, it’s difficult to say otherwise. 1:1 R:R @ 35 pips is not a problem if your win rate is above 50% and you have edge.
I would personally prefer to take a fixed risk on each trade (say 1-2% of balance) but adjust your TP and SL for each trade, according to the dynamics of the market at that time on that pair.
It’s more difficult to set a profit target based on a fixed number of pips movement because it is very arbitrary (and doesn’t take current volatility into account), unless you are using a stats arb quantitative technique or something similar, although I understand why you would want to set the trades into a binary choice like that.
I would ask - what do you currently use for position sizing. To work out the lot size you need to risk a certain amount based on your SL.
I am using MT4 on my phone to place the trades. when I do that I count the pips that I’d like to gain (TP), and those that I am willing to risk (SL). As far as only risking 1-2% of my account per trade, I would rather have more wins before I risk that much. For now I’m keeping my trade size at .01
Cool, sounds like you are scalping (or close to), a lot of people do that. it doesn’t really matter what your R:R is, provided the win rate is above what you need to break even.
Scalping is a problem if you don’t have edge (win rate > break even win rate), but it is attractive because you bank more wins initially and that gives you the confidence to expand your TP. But if you don’t have edge then in the long run you will lose.
It depends on you really, but I would say jumping to a more equitable R:R like at least 1:1 and trying to find an edge in the market will save you a lot of time.
Or is that not what you are doing? (scalping). I’m not sure I get what are currently doing.
I do not know what R:R means. I just started the baby pips education yesterday. I was paying a company to teach me before I stumbled across baby pips When you say “1:1” are you suggesting that I should increase my position size?If so, that seems very risky. Looking for an edge in the market sounds like gambling. I like the idea of using a technical analysis.
Fair enough
it stands for RISK : REWARD
or RISK to REWARD
and to expand on that it means
if you have a Risk : Reward of 1 :3 it means you Risk 1 Part of the Ratio for 3 Parts Reward
so to put that ratio into numbers
in pips
you risk 10 Pips to make 30 pips
or you risk 80 pips to make 240 pips
When you say “1:1” are you suggesting that I should increase my position size?If so, that seems very risky. Looking for an edge in the market sounds like gambling. I like the idea of using a technical analysis.