Newbie here! Am I going in the right direction? Are my expectations realistic?

Beginner Questions
#1

Hi, I’m new to Forex trading and have two questions.

  1. Are my expectations realistic?
    My goal is to eventually make $800 USD/month working no more than 20 hours per week on my trading. Is this possible? (That’s all I need to live comfortably in the country I plan to live in)

  2. Am I going in the right direction to reach my goals?
    [ul]
    [li]Started pre-school classes here at babypips.com
    [/li][li]Currently reading Forex Patterns & Probabilities by Ed Ponsi
    [/li][li]Downloaded the NickB method and I’ll read it in the next couple of days
    [/li][li]have been trading with a DEMO account for a few days now
    [/li][/ul]

I’m willing to put in hard work and learn all the tricks of the trade so that I can reach my goal.

#2

First, let us do some quick number crunches:
[ul]
[li]Let us go with 4 weeks in a month
[/li][li]Thus you are planning to put in 4weeks * 20hours = 80hours per month
[/li][li]$800 / 80hours = $10 per hour
[/li][/ul]

Let us assume that you trade EUR/USD (where PIP is 1.00 per 10k)
and that you use 1:100 leverage
With a 10k mini-lots (.1 lot)
[ul]
[li]1pip = $1.00
[/li][li]You would need gain 10pip every hour
[/li][li]That is 800pips per month
[/li][li]Averaging 26.66…pips per day (assuming a 30day month)
[/li][/ul]
With a 100k standard lot (1 lot)
[ul]
[li]1pip = $10.00
[/li][li]You would need gain 1pip every hour
[/li][li]That is 80pips per month
[/li][li]Averaging 2.66…pips per day (assuming a 30day month)
[/li][/ul]

Trading a standard lot looks easier for attaining your goal but you obviously have to keep in mind you will be putting more on the line (especially given spreads).
Verdict: [U]Possible[/U]

Things to keep in mind (that you have probably heard or already read about):
[B]Do not get emotional[/B]
Sounds easy but hard to do. Your emotional involvement is proportional to the amount you risk.
[B]Find your broker and learn your platform![/B]
Self-explanatory
[B]Keep your mind open and don�t be flat-footed[/B]

�You have to be fast on your feet and adaptive or else a strategy is useless.�
-Charles de Gaulle

And if you don�t like listening to dead, former French Presidents…

�During periods of discontinuous, abrupt change, the essence of adaptation involves a keen sensitivity to what should be abandoned � not what should be changed or introduced. A willingness to depart from the familiar has distinct survival value.�
-Peter Drucker �the father of modern management (Wikipedia)�

[I]More to come…given available time
Also, if I made any mistakes, I apologize, It’s been a while since I slept :([/I]

#3

Before we can tell you if you can expect to make $800 a month we need to know what size account you’ll be opening.

You expectations are realistic, if you have a large enough account. If you’re starting with $1000 dollars then you will not make $800 per month, but if you have $100,000, then $800 is very possible.

I’m a full-time forex trader and I make over $800 per month, so I know it’s possible. You are most definitely going in the right direction by going through the Babypip’s school and learning the NickB method. Those are same things I did when I started.

#4

What’s the NickB method?

#5

http://forums.babypips.com/free-forex-trading-systems/24198-nickbs-4h-scalping-method.html

#6

Aim for 100pips per week.
We work in pip goals here not dollar amounts as this accounts for people trading all different lot sizes.

#7

San,

I do not agree with a short term goal of pips, % or dollars. We should not be looking for anything other than consistency. I believe that if one can be consistent[B](ly profitable)[/B] in the long term then the time will come where the trader will make money, and that money will grow and compound until your final goals are met.

To have a short term goal of X number of pips, %, or $ value, means that you are going to trade to those goals and if you are short of the goal then you will put yourself at more risk than you would normally.

On the other side of the coin, there is the limiting factor. If you only trade to 100 pips per week, and make your goal what would you do? If you stop for the week then you are limiting yourself. Instead it would make more sense to regroup and replan not leaving the next trading “stone” unturned. Of course, after a round of successful trades I know I need to cool off, so I do not get the superman ego, and put myself at undue risk.

Of course this is all very easy here on the message boards and in writing, But the psychology to act mindful in the market is very hard.

#8

Yes, I agree somewhat. If we are consistent then it doesn’t matter you trade as much as your method allows. However, a lot of newbies (me included) will trade successfully and then trade unsuccessfully by jumping into the next trade. Having a weekly target (something a lot of professional traders do) will keep you out of the market once you have recahed that target and that will actually save you money by stopping you getting into bad trades.
There are benefits and disadvantages to both but I believe a weekly target can lead to consistency in a method where you might only make 1-5 trades a week.

#9

I disagree. Experienced traders don’t need weekly targets to keep them out of bad trades. If you need a certain pip or dollar amount to be hit in order to control your trading then you aren’t trading at all, you’re gambling. :slight_smile:

A weekly target is, in my opinion, a very bad idea. It can lead to both overtrading and revenge trading. I can’t see any redeeming qualities in a weekly target.

#10

I take a single trade (or none on occasion) each night and risk 2% of my account on that trade. My biggest trading demon has always been over-trading/revenge trading so this rule has been a godsend for my trading, not advised for everyone :wink:

All I expect each week is that I’ll end up with a number between -10% (worst case scenario) and +10% (best case scenario) because my risk=reward. I think expecting anything else besides that wouldn’t be doing justice to the endless possibilities in any given trading week.

That said, I do aim to have the long-running average of my weekly gains above Zero!

#11

A lot of people will say you’ll never make money that way, but I think that’s a really good trading strategy.

I don’t know what your system is for picking your trades, but even if it’s only 1% better than a coin flip you’ll make money in the long-term. :slight_smile:

Slow and steady wins the forex race!