Happy Wednesday night! I had an epiphany today. I was thinking: what if I told you that I would give you $1,000 USD if you ended next week at positive 20 pips? Would you be able to do it? You’d say yes.
Most people I’ve taught in the past 3 years would say yes. But you know what? Most traders out there can’t bring themselves to just end the week with a few positive pips. They have a misconception that they have to end the week with 200 pips or something. That’s insane.
If you’re a 20 pip a week trader, then so be it. If you are a 100 pip a week trader, then that’s great too. Be your best trader.
But most importantly, be yourself.
Comments
You are absolutely right! But what I have read lately is the following: When you want the 10, go and shoot for the 20. Because you may end but just right under your original goal. I have experienced it on my own while trading. I go for 10 Pip a day and so I exit most big trades way to early. I actually do not care to much because it´s my style. But I see mercifully faces when I talk to others about it. I guess it is this "Goal" thing you have also commented in your blog. The goal of most people is to maximize - so they are never satisfied ...
Posted by: Alexander Schock | February 4, 2006 12:42 PM
What is important is not that you make 100-200 pips at the end of the week; even Elmer Fudd got lucky once in a while! But, the question is- can you get 100 pips a week consistantly?
The important thing is to let the trades come to you. If you get 20 pips on Monday, and the rest of the week you didn't see any good trades...then you did great! The important thing is to keep to your system or trading plan, don't change it just because there was a crapy week in trading- stick to your plan!
Posted by: Cephas Flanagan | February 6, 2006 04:34 AM
I don't understand this sort of goal. I mean, I know that many people look at trading as a job, and want to get a regular salary out of it, but that requires them to have a particular view of the market.
But it's not like a job. The market hasn't promised you a salary. It's only promised you the opportunity to trade.
For me, the goals are all about following my system and making trades within my rules. If the market goes in the direction of my trades I'll do well, if the market doesn't go in my favor, I've done my best. In either case, I'm pleased with my results.
Posted by: gamma sync | February 14, 2006 06:42 PM
I just re-read Kathy Lien's section on money management and am trying to integrate it with the 10pips philosophy. She recommends the 2:1 reward to risk ratio. In that sense a 10 pip loss must be compensated for my 20 pip profit potential? What if the trade system produce 3 to 1 winners such that the losers are 20 pipers and the winners are 10? Then the cycle gives you your 10 pip profit which is by the way enough to make you INFINITELY rich in FOREX. My understanding of the 10 pip idea is twofold:
first: be extremely clear about the goal and do-ability of profitability. Second, recognize that the 20/30/40/100 pip trades are less frequent than the 10 pip profits. None of this stops somebody from the effective use of trailing stops, partial profit position closes, to stay in the 40 pip winner trades. There is a simplicity in saying: don't let the profitable trade turn unprofitable - no matter what.
Posted by: Oldvegas | March 1, 2006 09:50 PM
I really don't care how other poeple trade. No one really cares how many pips the other guy does, unless they don't know how to trade. Somedays I make 160 pips, others only 10. My trading style is simple, wait for the perfect trade (which seem to come about 2 times a week) then jump on it, and set a trailing stop. At the end of the week I look at myself in the mirror and ask myself "Did you follow your trading rules?" If the answer is "yes" I had a good week, because my trading is based on a profitable system. People you can make money on a 2 pip profit system or a 200 pip system. Design your trading system, then follow it.
Posted by: Everett | April 20, 2006 12:28 PM
when i first signed on with a company to learn currency trading... one of the comments i remember best is "anyone can get just 5 pips a day". i remember seeing the compounding calculator... but in the middle of all the information overload, the compounding was quickly forgotten and we all somehow thought we had to stay up day and night trying to get as many pips as possible to get anywhere. i'm still eating beans and cornbread a year after learning to trade. if i had been taught the art of discipline and just getting 5 pips a day along with the compounding... i could be living where i want today, doing what i want and eating what i want. i'm sure i could be taking this day off to not even trade if i didn't feel like it.
Posted by: amy | May 1, 2006 08:54 AM