Hi everyone,
New to the trading. Just been educating myself and be using a demo account. Took the plunge and opened a real account. I live in Japan and when I go to bed the markets get more action. So my question is, I want to set some take profits to my accounts and looking for a good Pip to set it at. Not looking for the lotto ineach one. Just an average. I was thinking 20 pips, is that to low or high? Any advice would be great.
Cheers.
Hi.
If youâre making regular profits at all, youre doing well.
The key to making more money is not to trade more often or to get more pips per trade, its in gradually increasing your trade size as you progress, always bearing in mind that the size of this should be relative to the size of your account.
Keep up the good work
For some instruments, time-frames and volatility-levels it may be too low, and for others too high.
[B]Key concept[/B]: itâs a mistake to define your targets in terms of [U]fixed numbers of pips[/U]: they need to change with market circumstances, and you therefore need to do this each time according to the [U]current/expected volatility[/U] rather than using the same number of pips for every trade.
Itâs not as difficult to do as it perhaps sounds: an easy way is to look at the ATR indicator (âaverage true rangeâ) which will give you an adequate indication, for this purpose, of what you can reasonably expect/hope for, by way of price movements. And learning how to use it will help you to appreciate the marketâs varying activity-levels.
Good luck!
Thanks. Just seems when I look in the morning at the charts it peeks around 2-3 am my time. Would take profit work better with a pertangae rather then pips? If so what is an average percentage to work on?
Cheers
I cant speak for others, but my initial TP placement varies depending on a number of factors.
For example, what S&R levels I think it is likely to hit as it moves in my favour, how many pips it moves on average versus how long I want to hold my trade.
Im also likely to move my TP if price advances towards it faster than I expected or if there is some fundamental change that suggests further progression is more likely than when I entered
Hello Japikid! You are welcome here! But please donât set your TP positions blindly! You need to study on market specially support/resistant levels! I set my stop loss and take profit positions according to the neatest support and resistant levels! In addition, you may try to use higher profit ratio like 1:3, 1:4 and more (minimum 1:2)! Donât go for 1:1 profit ratio! Best of luck for your trading!
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Thatâs [B][U]dreadful[/U][/B] advice - [I]really, really[/I] bad. :58:
Sorry to be so outspoken, but trading is difficult enough for beginners/learners, without having to contend with nonsense like this, thatâs likely to stack to deck even further against them, in a field of activity which has such low overall success-rates to start with.
R:Râs of 1:3 and 1:4 are [U]terribly[/U] difficult for aspiring traders to handle, because their win-rates, understandably, tend to be so low that the position-sizing (one of the most counterintuitive but important aspects of trading) is incredibly difficult for them to work out, without plenty of judgment and experience.
For inexperienced traders, aiming for a 1:3 or 1:4 R:R ratio is imposing a serious additional handicap on an already difficult situation.
Itâs also going to reduce their trading-frequency dramatically (just when they most need experience), and disillusion most of them.
A 1:1 R:R ratio is [I][U]far[/U][/I] more convenient, sensible and beneficial to them. It makes the calculations and position-sizing much easier, reduces their risk of blowing accounts through impatience, and [B]hugely[/B], [I]exponentially[/I], reduces the sample-size required for their results to achieve any statistical significance worth talking about.
In my opinion, people advising newbies to try to trade with a 1:3 or 1:4 R:R ratio are typically just repeating what theyâve seen others saying, think that âit sounds goodâ and âseems to be widely recommendedâ, and thatâs [I]exactly[/I] how [B]bad[/B] advice like this becomes self-perpetuating. 
Iâm currently putting together a plan and have a query about position sizing.
Part of the rubric I want to enforce is working backwards with each trade. Therefore, when the market conditions are right and adhere to my rules for a trade being opened, I will draw a P/L on tradingview based on my analysis.
The position size for the trade will be deduced by dividing No. S/L pips by 1% equity. As long as I stick to a rule of at least 1R on the P/L then Iâm not really looking at the profit, and more the potential loss. Does this seem overly cautious? Too much focus on losses? I just feel if I psychologically attune myself to potential losses within the microcosm of each trade instead of the profit potential, then Iâm never going to risk too much equity.
Interesting to hear your ideas about 1:1 R being convenient and anything over that being bad advice for beginners- I was initially thinking about no less than 2R in my plan, but I guess it really depends on the market fundamentals and analysis within each market at the time of tra
The position size for the trade will be deduced by dividing No. S/L pips by 1% equity.
This would actually be the other way around. 1% of your available equity divided by number of pips which you want to use in your SL (+average spread if you want be correct)
As long as I stick to a rule of at least 1R on the P/L then Iâm not really looking at the profit, and more the potential loss.
Yes, this is a great way to start. Hence risk preservation (knowing what the worst case outcome will be)
I was initially thinking about no less than 2R in my plan
Personally, I would not look at anything less than 2R profit targets, this would he highly advantageous as 1R would require a fantastic win rate of over 50% (net of the cost of trading, so over 50% in reality) This may look easy on paper, in reality itâs not so much.
As a side point, donât just set a profit target of 2R because âthatâs what you needâ - rather tune it into the market and ensure it is actually possible, rather than using 2R as an arbitrary target. This is perhaps where the jump becomes clear from being a newbie to more experienced - potentially why Lexy suggested sticking to a 1R profit target [B][U]to start with[/U][/B]
Good work, and good thinking.
You meant to say âdividing 1% of your equity by the number of SL pipsâ, I think? 
Absolutely not. Itâs completely normal. Thatâs the correct way to work out your initial position-sizing (adding to winning positions - if/when you want to get into that - is another matter, and done after moving the stop-loss anyway).
No - not at all. This is[I] exactly[/I] what you should do. Position-sizing is about risk management. Dividing 1% of your account (if thatâs your chosen risk parameter - and itâs often a good one) by the number of pips to the SL is what [I]should[/I] determine the position size. 
It does.
But what matters is to go with whatever kind of R:R ratio is predicated by how youâre trading, and whatever R:R ratio youâve proven to have a genuine edge, from backtesting, and forward-testing on a demo account.
Aiming for a higher R:R (e.g. 2+), especially when youâre starting, can make position-sizing hard, and can also produce long losing runs, which are the last thing you need when you want a relatively smooth equity-curve.
(Itâs difficult to generalise, without knowing more about exactly what youâre proposing to do. For some people, for example, the target will be determined by approaching a level of expected support/resistance, a âround numberâ, or whatever.)
Nothing youâve said above sounds âwrongâ to me, anyway. (Many of my own trades have a 1:1 R:R, too.)
Edit: sorry - I was typing while Jezzode was posting and had not seen his reply above. :8:
Iâm just a loose cannon Lexy, 1R trades donât entertain me much these days. Then again, Iâm very picky on when I can trade! Maximising profit or minimising risk, itâs always a tradeoff 
I agree with Carlos. You have to continue to use your strategy if it is profitable and increase your trade size.
Yea, I wrote that kinda late on and wasnât thinking straight, but that is ofc what I meant to type :).
Iâve started using a position size calculator on MT4 to try and stick to that 1% rule, as sometimes that heat of the moment thing for opening a position can make those lot size calculations frantic, especially when dealing in pairs not at base or JPY. Iâm still learning to get my head round them. Itâs quite useful to be able to know exactly the lot size just by punching a few numbers in on my calculated risk factor, SL and TP.
Again I am really trying to psychologically force myself not to even look at the potential profit and just trust that if my analysis is right and position is at least 1:1, I can just focus on that 1% risk figure.
I realise there is also one here on babypips as well (calculator), and even a section in the school on position sizing which Iâve glanced through to get the gist of, but Iâm actually still in the kindergartenâŚI am a kinaesthetic learner so need to be doing trades and trying out to pick things up as I go, whilst slowly working my way through the school.
How many people add the average spread to their risk % as Jezzode recommends? Interesting idea which I hadnât thought too much about just yet.
This comment was more on the assumption that you are only ever looking at either the ask or bid price quote, as most platforms just display one of these for convenience.
Therefore if you want a true stop loss level you will have to incorporate the average/targeted spread for such currency pair.
Stop loss in pips + average spread = gross risk in pips.
In your example, 1% of your equity is divided by this number to gain your position size.
Hope that helps.
Wow, that is more than I can comprehend. I made it through this book and looking for more on reading and understanding the candlesticks. Any recommendations?
Plenty âŚ
These are the books that most helped me, and enabled me to trade profitably âŚ
Profitability & Systematic Trading (Michael Harris)
[I]Trade Your Way to Financial Freedom[/I] (Van K. Tharp) - an outstanding starting-point
[I]Beyond Technical Analysis[/I] (Tushar S. Chande)
[I]Understanding Price Action[/I] (Bob Volman)
The Mathematics of Money Management: Risk Analysis Techniques for Traders Ralph Vince (we all need some reliable understanding of whatâs in this book, although not necessarily from this specific source, before trading with real money)
[I]Naked Forex: High-Probability Techniques for Trading Without Indicators[/I] (Alex Nekritin & Walter Peters)
[I]Daytrading[/I] (Joe Ross) (this is an updated re-issue of an earlier book - âTrading by the Minuteâ, I think it was called)
[I]Trading The Ross Hook[/I] (Joe Ross) (I keep coming back to this one again and again, because itâs simple and logical and helpful, and the whole concept is based on one of the soundest principles of price action trading, namely âbuy the dips in an uptrend and sell the rallies in a downtrendâ)
[I]A Mathematician Plays The Market[/I] (John Allen Paulos)
[I]Fooled By Randomness[/I] (Nassim Nicholas Taleb - very worthwhile!)
[I]Why People Believe Weird Things[/I] (Michael Shermer) - this book and Talebâs, just above, are hugely helpful - albeit indirectly - for âunderstanding whatâs going on in forumsâ!
Trading Price Action Trends - Technical Analysis of Price Charts Bar by Bar for the Serious Trader (Al Brooks)
[I]
Trading Price Action Trading Ranges - Technical Analysis of Price Charts Bar by Bar for the Serious Trader[/I] (Al Brooks)
[I]
Trading Price Action Reversals - Technical Analysis of Price Charts Bar by Bar for the Serious Trader[/I] (Al Brooks)
âWarningâ!: Al Brooksâ set of three textbooks is kind of badly written and very badly edited (especially considering who the publisher is), and pretty difficult to plough through, but their contentâs excellent, so those are a kind of âmixed recommendationâ: I think his online video course is much, much better and more helpful and more approachable, but itâs also more expensive ($250, I think - but thatâs still very good value, though, in my opinion, for about 37 hours of instructional videos).
If thatâs âtoo manyâ, Iâd start at the beginning and take them in the order listed above.
Thanks, that would take me 10 years to read all of that. I understand the basics of the candlestick but want more. Looking for a candlestick and how to use the indicators. Can we narrow it down with what Iâm after?
I hope you had that thread saved because that would take a long time to input.
Cheers
If you take out the last 3 books (which are admittedly slow going), I suspect it would take only a few weeks, really.
Some of those are really quite light and easy reading (honestly: not trying to be funny).
Iâm not quite sure what you mean by âlooking for a candlestickâ, to be honest - sorry. :8:
Iâm probably not the best person to help you with anything to do with indicators, Iâm afraid: I donât use them. (I donât even use candles, to be honest: call me old-fashioned but I prefer âbarsâ - they do give exactly the same information, though, just presented with a different visual emphasis.) :8:
One observation that might help, though, if you come across them: stay away from Steve Nisonâs books about candlesticks (theyâre awful). Sorry not be more helpful than that, but in the light of your reply, it seems I understand less about what youâre asking than I at first imagined. Apologies! :8:
I read this same book when I started out and,imho,the free school here is much better
Looking for a candlestick was that I am looking for more eduction in learning the different signs of the candlestick charts. Like short long wicks, skinny fat bars, triangles all there is to know and reading of the candlestick charts.
Thanks