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Thread: just 10 pips each trade

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    Default just 10 pips each trade

    A bear chased two hikers.
    One hiker, while being chased, stopped to put on running shoes. As
    he was changing out of his hiking boots, his companion looked at him
    in horror and exclaimed, “Dude, what’s the deal-io? You’ll never
    outrun the bear if you stop now!”
    Calmly, the other hiker said, “I don’t have to outrun the bear. I
    just have to outrun you.”
    Currency trading can be like running away from the bear. Trading
    forex offers more opportunity for fast financial success – and financial
    ruin – than almost any other market. The get-rich crowd has always
    been attracted to it. This crowd includes speculators, trading novices,
    me 6 years ago, retirees, and professionals looking for a way to get out
    of debt, increase the excitement in their lives, or simply get rich really
    fast.
    Up until now, this group might have also included you.
    From now on, you will be taking money away from these people.
    These are the people who will be eaten by the bear. You don’t have
    to outrun the bear (the entire market). In fact, that’s impossible. You
    can’t beat the entire market. But you can trade defensively — and by
    so doing, position yourself to profit consistently.
    Last edited by fxmakerich; 07-23-2007 at 05:07 PM.

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    The Four Groups
    There are four groups in currency trading. There are the novice
    traders – the greenies, the ones who try to outrun the bear and lose
    every time. We all start here. We all lose money here. Some of us
    lose our entire first trading stake (I did).
    In addition to the novice traders, there are three other levels of
    participation: the dealers, the institutional traders, and the
    advanced retail traders.
    In all of your trading, the dealers are the most powerful and they
    make the market, setting prices and putting together deals. Although
    institutional traders move more money around than dealers, it is still
    the case that your dealer either accepts or rejects your orders every
    time you trade.
    The institutional traders work in banks, wire firms, or
    government agencies. They trade huge amounts of money at a time,
    and the size of their trades gives them enormous power. Not super
    powers, but very close. Some of these traders are moving $1 billion in
    currency or more every hour. Some are trading billions of dollars
    every minute.
    Next, there are the advanced retail traders. This group is
    comprised of people from all across the world, sitting in smaller
    investment firms, offices, or even their homes. Eventually, you want to
    be a part of this group. In some cases, the advanced traders are the
    smartest group – trade for trade – than any other group. Because they
    don’t move a lot of money on each trade, they don’t have as much
    power as the institutional players. Because their trades are brokered
    by the dealers, they’ll never have absolute price-setting power. But,
    because there are so many novice traders, the advanced traders have
    plenty of people that they can feed to the hungry bears. Your goal as
    a currency trader is to aggressively take money out of the pockets of
    the novice traders.
    Don’t feel bad about that. Someone’s going to take your money
    along the way, and it’s going to teach you, very quickly, lessons that
    can only be learned through failure. So, every time you take money

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    from a novice trader, just remember: you’re teaching him a valuable
    lesson. After a while, you might even enjoy watching your hiking
    companion being eaten by the bear.
    Well, you might not enjoy it. But you will deserve every pip you
    earn.
    Get ready to put on your running shoes.
    Are 10 Pips Enough?
    The short answer is yes. If you trade 1,000,000 worth of currency,
    each movement would be equal to $100. So if you bought at 1.1445
    and sold at 1.1545, you would make 100 x $100, or $10,000. Now, I
    don't know about you, but I could think most people could live off
    that much money.
    That's not saying, however, that you can make $10,000 per day. Of
    course it's possible, but there are a lot of factors that make it very
    difficult. Consider the questions below tt you might ask yourself
    before trading:
    When should I get in a trade?
    Where should I place my stop loss?
    What happens if something goes wrong?
    Even more importantly, can you deal with the emotions of forex
    trading? Mastering the emotions of trading is more difficult than
    mastering the technical skills. You’ll soon find out what that means.
    GREED
    Most traders try to make a zillion dollars on every trade.
    They're greedy. This leads them to stay in a good trade too long,
    hoping to get more money out of it. This can lead to disaster — the
    trade can move against them and they get creamed. This happens all
    the time, and it still happens to me from time to time. It's the single

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    greatest threat in trading. But you can already understand why that's
    probably true. But how do you overcome greed when trading? We’ll
    get to that in a moment.
    REVENGE
    This is the other big one. A lot of traders flush some pips down
    the toilet and then want to strike back. So they double their last order
    and go for broke. It’s like, well … it’s like reaching down into your
    toilet. That’s gross. And it does not make you any richer.
    The impulse to get revenge is natural, and I still deal with this
    emotion often. We all do. It’s not going away anytime soon.
    Do not underestimate this emotion. Many traders have not only
    reached into the toilet of revenge, but have dived into it head-first.
    Remember: the market is not your friend. The market is so much
    more powerful than you are. You cannot “get back at” the market.
    Trading when angry or vengeful will be a total disaster. If you take a
    big loss, then stop, take a deep breath, and talk to a mentor or your
    mirror, or your favorite stuffed animal. Re-read the charts. Take a
    break. Chew on your toe if you have to. Even if you think you see
    the best opportunity in the world after you get blasted – make sure
    you take a long deep breath and pause before you do anything.
    A Defensive Approach
    It’s as simple as this: When I am day trading, I don't try to make a
    ton of money on each trade, and I never try to get revenge.
    Instead, I set up good trades, that have a lot of potential, and then I
    shoot for 10 pips as an initial target. Just 10 pips. That’s it. I don’t
    let myself lose a lot of money. I only try to get 10 pips at first, and if
    that’s all I get, then I’m out for the day. We’ll talk about how I try for
    more than 10 pips in a moment.
    For now, consider that it's easy enough to get 10 pips and, if that is
    all you can get, it's okay to get out. When you know that you can turn
    turn $10,000 into $130,000 in one year on 10 pips a day, it's no longer

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    important to strike back at the market or get greedy on one day of
    trading.
    And you can learn to turn $10,000 into $130,000 in one year on just
    10 pips a day. I am not promising that you can do that. I am saying
    that it is possible and I have taught traders who have done it.
    If you started with $10,000 on January 1st, and earned 10 pips per
    day, and only traded 17 days of the month, then you would end the
    year 2,000 pips UP, and with about $130,000. For a spreadsheet that
    shows how this works, write me with the
    word “10 pip spreadsheet” in the subject line.
    Why is this innovative, different, or revolutionary? Because you are
    going to not only take money from novices with this strategy, you’re
    going to take money from other advanced traders. Advanced traders
    want big money. They didn’t spend years learning to trade so that
    they could make $100 a day. They want big, big returns. They go for
    40, 50, 100 pips at a minimum. Jimmy Young, an accomplished
    currency trader and a friend of mine, only trades a few times per
    month and goes for 100 pips or more every time. I also teach and
    take these types of trades myself. But it’s only one way of
    approaching the market, and it’s not easy.
    Advanced traders are conservative with their trading capital because
    the market can take BIG swings against them when they’re waiting for
    100+ pips. Some advanced traders will think you’re nuts for getting
    out of a trade at 10 pips. What if it goes to 100 pips? Or 200? Won’t
    I be upset that I missed out?
    Not at all. You should find ways to trade so that your average gain
    is larger than 10 pips – and at least the same size as your average loss,
    or better. But I’m never displeased with 10 pips on any given trade.
    Let me repeat that:
    I am never displeased with 10 pips of profit.
    You should be grateful for any profit the market gives you. Don’t
    spend any time crying about how you didn’t get the maximum profit,
    or how you could have gotten so much more profit if you just stayed
    in the trade longer. If you want to do anything about it, then stay in

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    the damn trade longer next time. I’ll tell you how you can do that.
    GETTING MORE THAN 10 PIPS
    Let’s say that I find a great opportunity to go for 10 pips on a trade. I
    submit a market order, to buy the EUR/USD at 1.2900. I set a stop at
    1.2880 (20 pips) and I do not set a limit order.
    I am now long (because I bought) the EUR/USD at 1.2900.
    When the price that I can sell at reaches 1.2910, I have earned 10
    pips. I can either exit the trade with my profit, or stay in the trade
    longer. Here is how I stay in the trade:
    I move my stop to break even. If my initial stop was 20 pips (or,
    on this trade, at 1.2880), then I can move my stop to 1.2900. That
    means that if the price falls back to 1.2900 my trade automatically
    closes and I have lost nothing. I have gained nothing. I have traded
    defensively.
    But if the trade goes to 1.2920, and 1.2930, and beyond, I am
    prepared to get more money. I can lose nothing — I am in a 100%
    risk free trade. Now I can let my profit run and I don’t have to worry
    about anything.
    Many traders ask me why I would do something like that. Why
    would I accept a break even trade? My answer is a question:
    Out of 10 trades, would you accept 5 break even trades, 2 losers of
    20 pips, and 2 winners of 50 each? I would. That’s trading
    defensively, and it’s what I want you to do, at least at the beginning of
    your trading. You have to cut your losses short. Get out of the losers
    fast. Make sure you stay in the winners longer.
    How do you know when to just get out with 10 pips? I say,
    get out with 10 pips any time you want. It’s ok to just take 10 pips.
    How can you make money if your stop loss is at 20 or 30 pips
    and your gain is only 10 pips? You’re not going to take 10 pips
    every time. This is not going to be your only trading strategy. This is
    one part of your trading toolbox. Remember that you are going to
    move your stop to break even sometimes and go for more than just 10

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    pips.
    That said, I have taught traders who have learned to trade for
    10 pips of profit more than 90% of the time. They have made a
    lot of money going for small gains.
    If you earned 10 pips every day for the next 12 months, and you
    started next year with over $100,000 in your trading accont, you would
    be making between $10,000 and $17,000 per month trading
    (depending on your risk tolerance). Can you do this? Absolutely.
    Can you do this today? Maybe, maybe not. You have to dedicate
    yourself 100% to learning how to trade intelligently.

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    10 Principles
    1. Buy and sell on breakouts of support and resistance. Or, sell
    when a currency pair hits resistance and buy when it hits
    support. I teach this in the 1 on 1 training, and this is my
    major trading strategy.
    2. Stop trying to make $8 million on every trade.
    3. Always have a stop loss in place. Always obey your stop
    losses.
    4. Goal: + 10 pips every time you trade.
    5. You can set your stop to break even on 10 pips of profit, and
    then go for more.
    6. There is no ‘makeup’ strategy. If I take a loss, then I’m just
    trying to end up with a 10 pip gain for the day. If I can’t get
    it, then I don’t try for 20 the next day, or whatever. I can
    keep trying for the 10 pips gain as long as I haven’t lost more
    than 5% of my capital.
    7. Time: I can trade for a set number of hours per day, meaning
    I can have the trading platforms open and sit at my computer
    for a max of, say, 5 hours per day. If I can’t earn my 10 pips
    during that time, then I can set my stops and limits and walk
    away, but I can’t actively watch the market any longer.
    8. You must have a daily routine. More on that below.
    9. You do not have to trade every day.
    10. Cut your losses as early as possible and ride your gains as
    long as you can. Stops should never be less than 15 pips
    (that’s too tight for an initial stop) but limits are, well,
    limitless.

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    A Strategy:10 Daily Routine
    Here’s a daily routine that I’ve used in the Strategy:10 system. Some of
    the most successful months of my trading career happened when I
    followed this plan.
    Up at 3:00 am Eastern Standard Time (when the market is most active).
    Check the charts.
    Ask the following questions:
    1. Where did the USD close (5pm EST) yesterday against the
    majors?
    2. What effect will today’s economic reports have, if any, on the
    forex market?
    3. Are we at an all time high or low on any currency pair?
    4. What one pair am I going to focus on today?
    5. Where are the major areas of support and resistance on this
    pair?
    6. What are some good breakout entries? Some good entries
    when a pair fails to break out?
    Following this set of questions does not ensure that you are going
    to earn 10 pips every trade. But it certainly helps you. The most
    important question you can ask is What is the major trend in the
    currency pair that I am watching? If you trade with the trend, you
    are more likely to be able to find some 10 pip trading opportunities.

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