Why do we only shoot for 10 pips a day in the Forex Market?
10 Pips a day is an achievable goal. We want realistic goals in our trading don’t we? Trading can be stressful, why add to that stress by giving yourself a hard target to hit? New traders think they have to make 100 Pips a day to make it in the market. This is not true!
Set a reasonable goal when trading. 100 Pips or even 50 Pips a day is NICE, but will it happen every single trading day? I doubt it. If you can pull that off on a daily basis for just one year I would consider retiring!
When using proper money management, 10 Pips a day is enough to double your account every 3 months. This is due to proper position sizing and compounding!
If you are not sure about position sizing please email me with Position Sizing in the subject box and I’ll help you out! Often beginner traders do not know how many lots or mini lots they should be using with their account size. This leads to blown accounts and margin calls.
The rule of thumb I used was for every $1,000 that was in my account, I could trade 1 mini lot. When the account grew another $1,000, I would add another mini lot. For example, if my account had a balance of $5,000, I was typically trading with 5 mini lots. Which is around $5.00 a pip depending on the pair, it could be more or less. That’s what I started out doing. I know more about position sizing now so I have a better formula. It gets more complicated when you start scaling into trades. Scaling into trades is when you have 2 entry points of your trade.
If you have questions about scaling into trades shoot me an email with Scaling into Trades as the subject. We don’t mind helping out fellow forex traders!