The only problem with this is making the 20 pips a day, everyday. With a full time job and a family life finding the time to trade and having the market working with me during that time can be very difficult at times. This is why my goal is only 10 pips per day and 40 pips per week. Also, someone mentioned that you don’t need a big bankroll, that is wrong in the context of trading for a living as a sole source of income. A person will need to be able to trade well, consistantly to build up an account to the point where they can reasonable live off of the returns. I only say this because I am sure there are a lot of people who think they can make a living of a small balance.
Well said. Its all about consistancy. I’m concernd though that you look for 10 pips a day and 40 a week? If I may ask what percentage of balance are you placing on each trade? And what TF and time of day?
Although its hard to generalise, I’d seriously question the need to have any sort of daily target at all (other than maybe limits on losses). As soon as you start analysing returns on a day by day basis, your more than likely looking at varience, rather than long term expectancy, and thats possibly not a good idea.
Its quite common to see people arguing that they stop for the day once a predefined target has been achieved, but if the edge sets up, there’s no reason really not to take the trade.
I’d find it hard to dissagree with your first paragraph.
But if you have the correct parameters of PA on any given instrument you’ll know ahead of time where TP should be taken to minumise risk. In short you should know where to enter and where to exit. 
I can’t say I’m making a living by any metric. My starting principle was $50 back in February. I’m up to $179 now.
I wont argue with that
As a rule I have a incremental table that I use to determine my trade amounts. My balance is 5% of my trade size, meaning if I have $5000 in my balance then my trade size will be 1 lot. This is a growing amount according to my balance and keeps me from trading too big. I trade on an intraday basis on the 1H TF during about 8-12 PST as a goal, although sometimes I do some trading in the middle of the night when I get home from work.
Although its hard to generalise, I’d seriously question the need to have any sort of daily target at all (other than maybe limits on losses). As soon as you start analysing returns on a day by day basis, your more than likely looking at varience, rather than long term expectancy, and thats possibly not a good idea.
Its quite common to see people arguing that they stop for the day once a predefined target has been achieved, but if the edge sets up, there’s no reason really not to take the trade.
This is a business and I need to have minimum goals that will keep me in business and 10 pip/day is small enough to be dependable and big enough to make the money that my business needs to survive. The more I am exposed on a trade that is only supposed to last a few hours at most is more opportunities for the market to screw with my business plan. I am developing a habit and that is written in stone, everyday I will make 10 pips then stop with that account. Later when I am establilshed in my business and I have extra money to trade I will be able to put money on letting things run longer but this will not be from my main account. My main account is not for seeing how much money I can make, it is for paying bills and feeding my family. I am already in the process of opening a secondary account that will be my “fun money” account when the time comes.
I understand the need to make sure people don’t come to expect a lot of money every day but my goal is not difficult most of the time and in this business I need to be able to say what my monthly income will be at a minimum for planning purposes.
I’d say your metric was just fine… keep on doing what your doing. It obviously works.
Exactly right, I trade PA using two Pivot Point indictors (for comparison of different levels for reaffirmation of my entry/exit). I have noticed that my 10 pip limit usually places me very nicely between PP lines in the “meat” of that range.
OK good call… thanks for your honesty. But presumably your setting tight stops if your goal is 10 pips a trade? I’m not saying this is wrong but PA will dance around 10 pips even during slow time and during the Asian?
Have you considered looking to a higher TF with a lower % of balance trade? I trade the daily on multiple instruments at 0.1% of balance across perhaps 3-5 pairs on any 24 hour cycle. Firstly this spreads the risk (non-highly corrolated pairs) and secondly it allows more time and pips for a trades wriggle room. It would allow you to both fulfill your working commitments (real day job) and have evenings with the family with perhaps the odd look in now and again.
One final thought… if things go well… I mean when the figures get real to you… will you still trade at 5% of balance?
Pivit Points my… that takes me back to the pits trading days when there was no computer charts and retail… things have moved on a pace… watch your ass!
My 5% rule doesn’t equal risking 5% of my balance on a trade, it only gives me a way to consistantly determine the size of my trade. My balance is 5% of my trade size, not my trade risk being 5% of my balance.
Example trade:
Balance: $5000 (not my actual balance)
Trade size: 1 lot (5000 is 5% of 100,000)
TP: 10 pips
SL: I don’t usually use a stoploss, instead I have a pending hedge order in case the price takes off in the wrong direction (this needs to be watched closely as hedging has the potential to turn 1 loss into 2 losses).
And, yes, I will continue to trade this way until proven wrong by the results. My trade size will continue to grow with my balance so my 10 pips will get me more with every increase.
As far as increasing the TF, I have actually gradually moved up from 15M to 1H over time and I like this TF the best for my style and daily pivot points are useless at the 1D TF. I do use the 1D to verify long term S/R lines to check for signigicance and I also look there for the overall trend.
Quite obviously a man of conviction. It will be nice to revisit you when your account balance is $200k plus if your still on BP… hope you are… we need good traders and less hype. Will your drawdown still be 5% though on a single trade? LOL… if you make the 5% club, you’ll not be extactic about a 5% drawdown on a single trade. :rolleyes:
I do think that people who trade are making good profit margins, but i seriously doubt that anyone can consistantly double an account each month. After just 24 months 10k would be over $83 Billion. i work on making about 8% per month. i havent made it each month, but have been doing at least 3-5% consistantly.
Even with 100k 88% is enough to live off.
Liking this thread its real. Institutional traders consider 30% a year reason to pop the champagne. Their trading big $ accounts at 2X, 4X and occasionalyy 8X leverage.
Now by in large retail is poor guys bucking the odds on short TF’s and over leveraged… who’s the winner?
Try your strat on a longer TF in demo with a smaller % bal of account and even the odds?
To Carter:
Excuse me if my math is wrong but wouldn’t 20 pips a day (400 monthly) trading 1% of your balance (starting at 1k) at the time come out to around 600+ for the year ?
Even at 5 percent, you’d make just about 9k for the year but you’d make your first milli around 3 to 3 1/2 years if you are making those consistent pips.
If I’m wrong, please correct me.
In theory, you could double your account each and every month, but in practise that is totally unrealistic and even if you could, you would eventually not be able to place a trade large enough to reap that kind of return, nice to dream about it though…
and 88% of 100k might be enough for some but not all, there are people from all walks of life in here…
Cheers
To the original poster:
I agree that most of the successful guys can’t be bothered with forums anymore hence you won’t hear any success stories but if decide to start on this journey, you have to treat this at a business and work it as so. I know I am well on my way to be financially dependent over the next few years. I hope to be a more active poster as time goes on and be able to document my success once I open my big money live account. As with everything, it takes time and dedication. This ain’t no fly-by-night operation.
I see where your coming from but you’ve not taken into account ‘compounding’. With a $1k account and a 1% of bal trade to keep the math simple lol it goes something like this:
$1k & 1% 20 pips = $20 now lets say you build your accont to $2k. $2k & 1% 20 pips = $40, etc, etc. $10k & 1% 20 pips = $200. $100k & 1% 20 pips = $2000.
The idea is you start off small however as your balance increases with added wins you keep the trade percentage the same, in this example 1%. But the 1% of an ever increasing balance. In just over one year with a starting bal of $1k and 20 pips a day your account would be around $200k enough to earn a cool $mill a year at 1% of bal trades and 20 pips a day. Try it out in excell if your still not convinced. 
I’m doing it in excel.
For the first 4 months, you’d be making around 40 dollars a month, the middle would be 50 a month and towards the end of the year, it would be 60 a month. Thats at a hard # of 20 pips daily (not taken into account days you might surpass this).
Ahhhhhh … perhaps you’re thinking in standard and I’m thinking in mini?