Are you struggling to break-even each month trading Forex because you are aiming for small profits of 10 - 15 pips each time? If you are indeed struggling with this problem OR planning to scalp the market for 10 - 15 pips each time hoping to make 100 - 150 pips end of the day, then this article would shed some cruel truth and allow you to get enlighten perhaps.
Most traders naturally believe that aiming for 10 - 15 pips is anytime much easier than trying to aim for 30 - 50 pips. This is so because anytime, the market could be moving in the 10 - 15 pips range but it would take quite a while or even whole day to move 30 - 50 pips for some currency pairs.
Aiming for small profits of 10 - 15 pips is " easier " as accordingly to most traders who choose to believe so. But after they literally tried it for a month or so, they would normally end up trying because they are merely breaking even and very tiring.
Now, in any trading game, it is nothing more complex but just a game of " Probability". If you can secure more wins than losses, you win end of the day. Very simple facts based on logical approach that is.
Most only think of " how easy " it is if they are only aiming 10 - 15 pips each time, but what about when the trades go against them?
When do they cut loss? 15 pips, 20 pips or after 80 pips? Some might set the cut loss at the 15 pips point and aiming for a risk/reward of 1: 1. And if you have been trading for awhile now, you would definitely agree that with such stop loss range ( 15 pips ), it is very hard to survive at all. Perhaps 8/10 times it would get hit and there goes your capital.
Furthermore, whenever the stop loss is about to get hit, most traders would bound to panic and even try to " Shift " the stop loss and end up suffering even greater deficit - Which only drain away their trading capital!
At this point, I would say that if any trader is really serious about making a nice income out of trading Forex and enjoy the freedom of time and financial returns, then it is no good to use strategy that only aims for such small profits each time.
Instead of aiming for 10 - 15 pips, why not try aiming for 40 - 45 pips? And set the Stop Loss at about 30 pips so as to give " Better Breathing Space " for the trade to develops smoothly.
Not only are you getting a Good " Risk/Reward " ratio of 1.5x ( with 45pips / 30pips ), but it would save you from ( a lot ) of unnecessary frustrations seeing your tight stop loss getting hit again and again. And of course, it is not as tiring too!
Aaron Tan is a full time Forex trader working from home. Ever since he started trading using Forex Price Action, he became very successful and even managed to quit his day job to trade full time and making a nice income every month.
In his blog about Forex Trading Strategies, he will be sharing with you how he achieve that in the simplest way possible.
Visit his Forex blog here: http://www.forextradingempire.com
Article Source: [http://EzineArticles.com/?Forex-Trading-Tips---Why-it-is-Bad-For-You-to-Aim-For-Small-Forex-Profits-(10-15-Pips)?&id=4004779] Forex Trading Tips - Why it is Bad For You to Aim For Small Forex Profits (10-15 Pips)?
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