Goal – 20 pips per day

To survive in the FOREX market, you have to limit their losses to barely noticeable levels. And then you have to take more money than the lost income. Quite simply, yes?

But why do most traders are not able to comprehend this truth the cornerstone of trading? Because of psychology?

And now let’s move on to the title of the article – put a goal to take a net twenty pips every day trading. I know it sounds boring. It is not as attractive as the deal for 100 pips. But you are trading to make money, not for fun, right? Otherwise you are likely to destroy, and fairly soon. So let’s Fix in the mind that this is – Business with a capital letter, which should, ultimately, profitable. Begin to trade on the mini-run, where one has a lot size of 10 thousand dollars.

A quick loop through mathematics. At first, let’s talk about margins and how to determine your actual trading leverage. Most brokers advertise margin on the account size of 400:1. This does not mean anything else, except: if you think that trading with 400:1 leverage – a good idea, then you – fool. What does this mean in reality – the required security deposit for open positions will be extremely low. This is actually not bad, right? Well, I think so. But not always. Remember, leverage the same increases and profits and losses. If you open a position with the actual leverage more than 5:1, this is the path to destitution. Actual shoulder can be calculated, if you compare the size of the net open position in the trade balance of your account. Thus, if the total size of your open position is equal to 250 thousand dollars, and the account you have $ 10,000, your actual leverage – 25:1. Shoulder 25:1 – a dangerous level, unless, of course, you do not want to finish trading career a couple of months. Once you find your way and you can win more than lose, it will be possible to return to the issue of leverage. But until then you should play more conservatively.

We recommend that you deal with a maximum 4:1 leverage on a deal. But try to put the deal. Thus, we can, with half a open positions, margin 4:1 each, combined to bring leverage to 24:1. We know how to do this and try to tell you. So let’s limit the maximum amount of leverage to bargain a 4:1 ratio. Let us also accept that Friday – the day is not too good for a beginner in trading. Believe me, this is so. And let us to capture 20 pips profit every day at 4:1 margin. This may be one-time 20 pips or 2 times for 10 pips or 4 times to 5 – at the outlet will still be 20.

More of us is mathematics. When you trade 4 days a week, fixing 20 pips profit per day with 4:1 leverage, your actual income for the week amount to 3.2%. You are laughing over a puny 3.2%? What a waste of time and say … you could not mistake stronger! Even if you have the whole year will not increase the size of the lot in the transaction, only retaining the original settings, and stay true to its goal of 20 pips for the day, this void weekly earnings in the 3.2% for the year will bring benefits to 166.4%. You still funny? I do not think so.

Now many of you take over payments, check if there are any mistakes here. This is understandable. Let’s say you have a Forex trading account for the size of $ 10000. When referred to the original scenario, the transaction size will be 40 thousand (10000 $ × 4 – Four minilota). When the goal 20 pips on the day of the week you get a profit of 80 pips for the four lots on the 10000. Thus, your 80 pips multiplied by the four lots in the transaction, turn into 320 pips per week on a single lot. Pips at a mini-account for most couples is $ 1 per lot. So, within a week you get a profit of $ 320. Think, will tell you. Yes I am alone accounts for more than a week pay …

Exactly! You can not survive on income from trading in the account size of $ 10,000, hoping to stay in the market longer than a few months. You are always trying to catch the big moves, which means your feet will become very broad. You lose in the blink of an eye the latest T-shirt and housing.

If you want to live on income from trading, you should find out how much money you need to do in a week that is enough for life, so do not forget to add a little for unforeseen expenses. Now go back and calculate the size of the account from which you will need to begin to deal calmly and be able to pay bills. Now imagine that you are not every day can make their goal of 20 pips, no matter how tried.

In the meantime, not throwing its substantive work, deal in their spare time, make target pips and save these paltry 3.2% profit per week, increasing his account at the time can afford to trade full time. By the time you obviously have to master the art of trading goals, and the transition to trading as a principal occupation, will be a lot easier.

If you are not satisfied with 166.4% annual return on invested capital, you – the complete idiot and you should stay away from the business of currency trading.   Interface Font  
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