Stop Searching for 100 Pips!

Beginner Questions
1

Hello fellow baby,

Because I’m new to this forum I’ll start of by tell you something about me.

I have been in forex for about a year now and it all started of with this site, I learned all the fundamentals here and even some advanced skills I still use today, So I highly recommend that you go through the school and pass with a good grade.

I’m Icelandic and probably the only one of my kind here so please excuse my gramme and spelling.
I’m at the stage where I make all my earnings from forex so I decided to spent some of my time teaching what I know for free. I even put up a website where you can read and learn some of my tactics and methods. When I say free I mean free, you’ll not find any ads or affiliate links on my site, just the truth and nothing but the truth.

[B]Stop Searching for 100 Pips![/B]

In my research I stumble upon many blogs, forums, signal sites, trading systems sites where everyone is in search for 100 or more pips per day. If your one of them stop it right now!

I want you to ask your self this question 'Can I get 10 pips in profit per day, easily? ’ If the answer is yes you almost have it all figured out. Now I know there are many people out there that say they can get 10 pips but are they 100% sure they won’t lose some pips before they get the 10. The answer is [B]NO[/B]. No own is 100% sure there trade will make money and thats the beauty of forex.

I only get 10 to 20 pips per day and sometimes I only take 5 pips if I don’t like the “weather”. Yes I know, I make all my income from forex so how in the world can I life a good live with only 10 pips! [B]EASY[/B], the thing is I only need 10 pips because I’m trading big money, these are no $1 pips! try $20.

The thing I’m trying to tell you is basically ‘Many small things become Big’ close all your signal sites, forums, trading systems and news service. You have to learn this first and it’s called ‘money management’ if you skipped all lessons regarding money management you can FORGET making a living with forex!! Read it, breath it and eat it if you can and not just ones!

The thing is that you need to know how much money you can spend before you spend it. this is why 95% of all newbies lose all there money in there first 90 days of trading. They look at forex like a online casino, is it going up or down :smiley:

Okey, your new to forex and don’t have that much money to spend. Thats alright, you can almost find all the info about forex online today and if you work hard in your demo account and learn all these advances skills before you start trading live forex you just could make a great income with forex. But this is not they way I did it and I recommend you don’t do it either.

Start of by opening demo account right away, pick the smallest capital you can choose and trade only with the capital you have in real live. So if your thinking of only opening a mini account with $400 USD capital, only trade 3 to 5% of that money daily with a stop lose around 10 to 20 pips.

[B]5% of capital ($400) = $20 / 20 (stop lose) = 1 (lots to trade daily)[/B]

Now only trading 1 lots in a mini account gives you $1 per pip you gain. Let’s say you made 10 pips the first day in your first trade, so you go again the same day and try to get more pips. WRONG, don’t do it. just take your 10 pips and go spend your day playing pool or watching video, come back the next day and do the math again.

[B]5% of capital ($410) = $41 / 20 (stop lose) = 2,05 (lots to trade daily)[/B]

Now you can trade 2,05 lots, but of course you can’t trade 2,05 lots so you keep trading 2 lots.

Skipping to day 20!!
[B]
5% of capital ($600) = $30 / 20 (stop lose) = 2,5 (lots to trade daily)[/B]

Now you could risk little bit more and go for 3 lots so each pip would be worth $3 :smiley: Or do it the safe way and wait until the math gives you the green light on 3 lots.

Do you understand how I got to my $20 per pip and still counting???

Of course you won’t always get these 10 to 20 pips, sometimes you’ll hit your 20 pip stop lose. This is where you [B]HAVE[/B] to hold your ground and close your trading platform, don’t try to make up your lose, just wait for the next day to come and go into your trade open minded, not filled with hate.

I use many signal sites where I pay my monthly fee, I have them all running on my screen and when I see they almost all agree about a signal I go for it. Do it like that and you will lose only about 10% of the time.

Sorry, I’m not going to tell you everything :smiley:

I recommend you find yourself 2 to 3 good signal sites and start using them with your DEMO account. In the end you’ll see that history repeats it self and you won’t need the signals.

Start making your 10 pips per day in your demo account and after that see if this method works for you :wink:

[U]It’s all about discipline[/U]

2

Hey there, Sir.

First of all - thanks for sharing with us!

I’d like to add, though, that I’m not sure if your money managment would be the best for beginners. you’re talking about real high levarage. one which might be too risky for the newbie trader. also, risking 5-10% of your account in a single trade is not recommanded for all beginners. you might have the skills and discipline most beginners (and many veterans) don’t have. this is why I must say your system might not suit all of us.
in addition, I don’t know if day trading is for everyone as well. I think that aiming for a monthly goal would be more suitable and less stressing, because you may lose many battles, but can still win the war, whereas in daily trading each day is a war for itself.

but then again you’re the one making a living out of forex…
If it works for you -> you rule :slight_smile:

Regards.

3

Even the most seasoned traders would never dare to risk 10% of capital on just one trade alone. Many people that risk this much are in fact newbies in the forex market. 6 losses in a row, and you’re down 60% in equity. Can 6 losses or more happen? Absolutely. There is no magic system that prevents losing streaks. The reason why good traders don’t risk that much per trade isn’t because they don’t have confidence in themselves or the system, it’s simply because a losing streak can easily wipe them out. The key to success in trading is to be able to stay in the game long enough to ride out the bad times. Trading too high per trade is only a disaster waiting to happen.
Also, I disagree with the title of the post saying to stop searching for 100 pips. This all depends on the time frame chosen. Traders that trade the longer time frame typically look for trades with profits and even stop losses of 100pips+. Generally going for a higher pip count and having a higher stop loss limit will reduce costs of each trade because of the spread. If for example, you have a 2 pip spread, a 20 pip SL, you are basically paying about 10% for fees. 50 pip SL, you are paying about 4%, 100 pip SL, you are paying 2%. Everyone has their own preference of trading, either it be long term for 500 pips a trade or short term scalping only 5-10 pips a trade. What matters most is how they manage their money. There is never only one way to profit in this market but to become truly successful, a sound money management system is crucial.

4

Your totally right parsush,

This is not for everyone to do, but I highly recommend trying this somewhere on the way.

You don’t have to use the digits I used, change them! make it 2% and start with $300. no problem! just use the method

after doing this for some time you get the feeling where you can safely trade and get your 10 pips. Trust me on this. it’s just like playing golf!
You start off by never hitting the f*** ball and everything is getting on your nerves but if you have discipline you don’t throw away your clubs, you come back tomorrow and start hitting the ball again! finally somewhere on your way you’ll get this feeling, somehow the club is doing what you want it to do. you go back and try to remember what you did when you hit your first perfect ball. where was the club in my hand, where were my legs placed on the ground!!
If you play golf you know what I talking about. it just clicks. :slight_smile:

The same with this method.

And the funny thing, after you get the felling you only need about 30 mins at your computer screen. :wink:

5

I know where your coming from. I totally used the wrong digits in my post!
You should not start of by risking 10% maybe at the most 5%

But like I said in my first post I’m telling people to try this and in a DEMO account. I sure hope no one is going to trade this method live right away!

trade this method with what ever digits you want, just like I said in post number 2! after some practice you’ll find it click. At least I did, and I think some people will too.

7

Hi there Tess and thank you for your lovely message,

I see that you don’t agree with me. Please understand that I’m Icelandic and so things just don’t come out right. my gramme and spelling is bad, I know that.

To explain your quotes, I just did not want to keep people left with nothing, because I don’t believe in telling people what they should do step by step to the end. they should have to do some of the work them self.

The last part of my article was to get people to do something about what I was talking about. I started of by using paid signal services and still use some of them to day! but by doing it I quickly found out that ‘history repeats it self’ so I don’t need the signal service any more!

I just think it’s a good way to start, I’m just telling people how I did and would do things. they don’t have to do it. it’s all up to them.

Regards,

8

I see that most off you don’t agree with the digits I used so I have changed them. I find it that you all are right, I should not have told people to risk this much of there capital.

I also see that many of you don’t aggre with me on some parts of my article so I’m asking you if you wan’t to give me an honest review on the method so I can use them on my website. because I only aim to give people the best information on this subject as possible.

of cource I’ll submit a link to your website or if you don’t have a website I’ll write your babypips user name so they can learn even more.

Best regards,

10

To Sir Forex :

Your ideas and input are, of course, of interest to us all.
Your English and grammar are in good order.

However, I have read Tess’s post carefully and I think the majority of posters here would probably disagree with your idea of not chasing 100 pips.

You have entered the arena of scalping and that is a very contentious area at the moment.

The following comment is not meant to hurt but rather be constructive :

You say that you have done 1 year of trading.

I would argue that this does not allow you to teach.

Firstly, a proven track record of trading is asked for, and I submit that this comes with only, say, some 10 years of trading.

Secondly, we have all listened to “boretotears” speakers who certainly know their subject, are academics, but know nothing about presentation.

Teaching is a skill and carries a qualification. It requires years of study - look at a primary school teacher who teaches little children.
Much training is needed here. For example, the children see adults as skyscrapers who totally dominate them. A teacher is trained to stoop down and speak to them at their eye level.

A teacher understands the principle of “knowlege assumed” by the pupil.

A good teacher makes a difficult subject absurdly simple to understand. This is done with teaching aids, bright colours, simple words and a host of other things.

As a retired schoolteacher (maths, phyisics, chem), I certainly know how to make my subjects simple to understand.

But I am a beginner in Forex and would not dare to instruct anyone. :mad:

So please continue to submit all your input so we can get ideas and learn ourselves.

But as to teaching - I submit a definite NO!

Kind regard, Tymen Wortel, Perth, Western Australia.

11

thanks for sharing SirForex.

i also have had this same system as you a while ago, but dropped it, because i found trading on bigger timeframes and holding a position open even for a couple of days can be much more rewarding and less stressful, and i don’t have to sit in front of the computer all day.
for anyone who whishes to use this system, it really can work out. only thing you need is patience and know when the market is giving you a good signal and enter the trade

12

The strength of babypips is it provides a free source of information and the school is excellent. The weakness for the new trader is to sort out the wheat from the chaff in the various posts. I agree with Tymen that you have to be special to be a teacher and also you have to have done the hard yards over many years to consider you can really make it in this very difficult business. Most people dont. As with any other business if you can find yourself a mentor who can trade and is willing and able to teach then hang on tight for as long as they will allow. With regards to Sir Forex perhaps the only thing I agree with is that you dont have to make a 100 (or even 10) pips a day but you do have to know when that is available and take it (anyone who has traded a yen cross in August would know how ridiculous getting out after 10 pips would have been). There is much to learn, great uncertainty and challenge and a market driven by institutions employing the brightest PhDs and state of the art computers. Not only that but they have access to data on orders denied to us. So against them we have one arm tied behind our backs. Believe me if we had any sense we would realise that this game is so stacked against us we would never try. However some do make it and a bit like wannabe Hollywood stars we dream of being in that elite group. You need to keep the dream alive and work hard but do not forget the reality. If after 1 yr you are making it Sir Forex (and I do know traders who have managed it in that timeframe) then good luck to you. But the rest of us need to keep our feet on the ground. I would highly recommend VanTharps ‘Trading Your Way to Financial Freedom’ if you really want to get your head around risk, reward, probability etc which to some extent is fundamental to the issue of whether you shoot for 10 or 100 pips

13

I believe its all in the trader. If one wants to trade shorter time frames and thats there interest then yes of course you want to aim for shorter profit levels of 10 - 20 pips. And since your S/L will be shorter this will allow your lots sizes to be larger. Its all in the math as well and what philosophy you want to obey by.

Longer frame traders shoot for the higher pips because that is what their system produces. It just means that their lot sizes are not as large but its still falls out the same since the profit levels that their system is desined to give should give around the same results. Larger profit levels, smaller lot sizes.

AH