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10 Pips a Day to Wealth - guaranteed

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Guest cooter

In the VSA thread, PivotProfiler wrote the compelling post, which I've snipped here, as I didn't want to clutter that thread with my musings:

 

 

First:

 

This is not a picture of the futures, but the spot.

 

Second:

1pip = 10 dollars

 

10=100

5*10=500 (5 contracts)

10*10=1000 (10 contracts)

 

You want more money, trade more contracts. I am not calling you a losing trader, but that is a losing trader's mentality. A trader could be set for life if he could make 10 pips (net) a day every day. Not all trades need to be 150 pips. Greed may be good but it gets traders into trouble.

 

 

 

Substitute ticks for pips, and say, the ER2 Russell e-mini for your favorite spot forex, and it becomes apparent that this is potentially doable for any futures trader.

 

My simple question is... if netting 10 pips or ticks a day is all it takes to achieve immortality (or at least everlasting wealth), why is it so many traders are having issues doing so? Any thoughts?

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Guest cooter

If you quit trading when you are +10 or greater, then you wouldn't have that problem.

 

It's been argued elsewhere about the merits and pitfalls of taking everyone of your setups when you see them during the trading day.

 

Is that what you mean about consistency?

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I think I can answer your question. For most people, myself included, it is easier to be methodical and disciplined when trading a contract size you are comfortable with. I trade ER2 exclusively for a living and my scale in/out size is 2-8 contracts, never trade less than 2, never more than 8. My account size has grown significantly since I began and I know I should "step it up" so to speak. Problem is, I have become comfortable with the risk I take and "stepping up" that risk would make me more emotional than I care to be. Something I need to work on for sure.

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Great topic...

 

I've gone back and forth over the years of taking 2 ES pts and walking away vs. taking everything on the day and my conclusion was that you need to take all your setups as some days are +10 pts and some are +1. This is what I found for my trading. Some days are a gift from the trading gods and other days they are punishing me is what it feels like. On the 'gift' days, I have to take the gifts all day, every day.

 

For example, this morning thus far has been blah on the ES. Just not a ton of movement right now so my short at 8:10am EST hit one profit target and the remaining contracts were trailed out. Nothing exciting. Meanwhile Wed was a day that just kept on giving. And giving. Now if I had stopped at +2 on Wed, I would have literally left a few thousand dollars on the table. And today I am waiting patiently to try to make a few bucks. See the difference? Stopping at 2 just capped my upside and made days like today much more important, which is completely backwards in my opinion. I don't need chop days to become important and weigh heavy in my outcomes. I need days like Wed to be the most important!

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There is some truth to this money management method but it will only work if you truly accept it as a key method to riches from trading.

 

I did exactly that when I made $10k trading 1 lot of SP, my exit plan was screwy, in fact did not have one back then, but the profit targets were from 2 ticks ($50)to 40 ticks($1000), 100% discretionary.

 

Believe me, I practically shot from the hip back in those days.

 

Trading more lots comes with time and the stomach to take those loses and wins when the occur. I remember reading an article from Stocks and Commodities and it illustrated just that, when you first start out, you can only stomach small loses, but as you gain more experience, your ability to take large loses increase. Only you know just how much pain you can take, not basing it off your strategy and its winning probabilities because in my opinion, if you have a 80% winning strategy, it only takes that 1 time when you take a big hit to totally lose confidence in it. Had that lose been kept small, well you get the idea.

 

I SHOULD HAVE READ THE WHOLE INITIAL POST!!!

 

Why do traders have a hard time walking away after they make their targets and points?

 

What else are they gonna do for the rest of the day???

 

Heck people think to be a trader, one must always trade or be on the look out for a trade. People may be trading for the sake of trading and not about the money, but then they say to themselves, that contradicts what traders do, its not about the money. Heck it took me a long time to get over that. It is about the money, you need to have a total lack of disregard when you lose, but keep it when you gain it. Still a total contradiction if you ask me and makes no sense.

 

There are many reasons in my mind why people cannot follow that, win or lose, call it a day mentality. Some people just like the action. Some what to make a point to themselves and to others that they know what the heck they are doing.

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I think I can answer your question. For most people, myself included, it is easier to be methodical and disciplined when trading a contract size you are comfortable with. I trade ER2 exclusively for a living and my scale in/out size is 2-8 contracts, never trade less than 2, never more than 8. My account size has grown significantly since I began and I know I should "step it up" so to speak. Problem is, I have become comfortable with the risk I take and "stepping up" that risk would make me more emotional than I care to be. Something I need to work on for sure.

 

2-8 lots eh?

 

heck try 2-9, just add that 1 lot to your max, but it may mess with your exit ratios. :p

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What stops would you use in your quest for 10 points a day? If a 10 point stop then what happens when you lose 3 and are -30 for the day? You now need +40 to pull it back. 2 more losses and you've wiped out a week's profits.

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Guest cooter
What stops would you use in your quest for 10 points a day? If a 10 point stop then what happens when you lose 3 and are -30 for the day? You now need +40 to pull it back. 2 more losses and you've wiped out a week's profits.

 

Stops are a fact of life for traders. If you get stopped out 3 times in a row in a day (or series of trades), you need to step back, stop trading, and evaluate your trading plan and setup.

 

That means checking to make sure your entries and exits were valid and per your plan - assuming the setup works and has a reasonable positive expectancy for you.

 

The one thing you don't want to do is "chasing your own tail", trying to make up lost profits by recklessly overtrading.

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What stops would you use in your quest for 10 points a day? If a 10 point stop then what happens when you lose 3 and are -30 for the day? You now need +40 to pull it back. 2 more losses and you've wiped out a week's profits.

 

I couldn't agree more.

 

Limiting your upside and knowing stops are going to happen is a recipe for an uphill battle in my opinion.

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Guest cooter

Heck people think to be a trader, one must always trade or be on the look out for a trade. People may be trading for the sake of trading and not about the money, but then they say to themselves, that contradicts what traders do, its not about the money. Heck it took me a long time to get over that. It is about the money, you need to have a total lack of disregard when you lose, but keep it when you gain it. Still a total contradiction if you ask me and makes no sense.

 

There are many reasons in my mind why people cannot follow that, win or lose, call it a day mentality. Some people just like the action. Some what to make a point to themselves and to others that they know what the heck they are doing.

 

It's all about the money, unless you're a compulsive gambler. In which case, you'll just keep trading regardless of the outcome - good or bad.

 

No limits, no morals, total financial anarchy! Well...not really. Quit while you're ahead or behind, and come back for another day - would that be the best way of summarizing what you are saying?

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You have got to be able to have +20 and +30 days if you are going to try to make +10 every day. No one ... Nobody ... Nada ... makes their goal Every Single Day

... 3 Stops and you're out for the day.

 

... If you get up +10 or +20 then keep trading until you get stopped -then quit.

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I think there is another problem, it's the mental exhaustion and stability. No one consistently stay in one emotional or mental state of well-being everyday for next 10 years, no one. So making a 10 tick a day every requires perfectionism. Plus, when you're down (stopped out) a few times, you're more unstable because you need to "make up" or "catch up", usually that the mental thought will start eating you up.

 

As for exhaustion, not everyone can go at it 6-7hr a day trading everyday. Heck, after 3 hrs or 6 trades, I'm exhausted. As the day or trade numbers wear on, I start to get sloppy, start giving back. This is mental exhaustion. Of course, anyone can train themselves to endure longer hours to stay mental focused throughout the day, productivity may wind down eventually.

 

I disagree with the upside limit, it's pretty much "limit your profits and let your losses run" philsophy. The only way I counter that is my stops have be 1/2 the size of the upside limit or even lower.

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The only way I counter that is my stops have be 1/2 the size of the upside limit or even lower.

 

So you have very TIGHT stops then. Am I to infer that you get stopped out more often than not, unless your entries are very precise and correct?

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I think this is all related to how one individual thinks. Each person has a level that he is most comfortable with.

 

I once read a article saids that for Donald Trump to think he is a millionaire is an insult to him,(he have to be an billionaire), but for a lot of people being a millionaire is a big achievment.

 

This same point of view can apply to traders, what level is comfortable each traders is not going to be the same.

 

If you are getting to a level that you are not comfortable with, guess what. One will do thing that bring him back to that comfortable level.

 

So my view is that, so many traders are having problem to achieve that 10 ticks or pips per day is because their subconcisous mind is not comfortable for him to be that way.

 

This is why it is so many traders have to do adjust thier attitude to be able to step up to the next level.

 

maybe one would want to exam upon himself to see if that is the issue.

 

weiwei

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Guest cooter

Yes, there are some traders who scalp for ticks, others who trade for points. It all depends on your frame of mind.

 

As I've said elsewhere, the reason why Tiger Woods almost never misses the cut (at one point his streak was 108 in a row) is because, unlike most other golfers, he truly doesn't play to make the cut, he plays to WIN.

 

A subtle, yet powerful difference in attitude and approach wouldn't you say?

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I disagree with the upside limit, it's pretty much "limit your profits and let your losses run" philsophy.

 

When I said you are limiting your upside, that's what I meant - your profits (upside) are limited and your stops could run for awhile... That's bad odds even for a simple guy like me to figure out! ;)

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Let me add my 2 cents here : one thing is the RRR on a trade, wich means that the trade has more potencial reward vs potencial risk... that has to be embeded on your technical aproach, whatever maybe... now if a trader on a portion of the day with x amount of trades has met his daily target... and ... the rest of the day for him is sinonimous of allien territory then he should be asuming that HIS session is over.... this happens for people who principally do scalping.... the scalper universe is very little, a complete session is an ocean for him... so he prefers to scalp at the lake of the first hour where he knows what fish there are there.... he is not interested to go for great sharks in the ocean where maybe he will end killed....

 

So this aspect of quiting trading after certain time of the day and making good profits on your land its really a matter for scalpers.... it by no means compromises his RRR vision... your trades MUST have a godd RRR embeded on the technical aproach.... thats basically how it works... at least for me cheers Walter.

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So far my only Daytrade type setup I am willing to trade on the rest of the session its the super coil break trade, havent been trading it for a while , maybe I will start considering it... today there was a sweet super coil break... will make a thread on that... cheers Walter.

 

and yes that kind of trade... let the wins make run.... :):cool::o:);):rolleyes::) nice new smilies ¡¡¡ how about this one chatterbox jejeje

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So you have very TIGHT stops then. Am I to infer that you get stopped out more often than not, unless your entries are very precise and correct?

 

I have 4 setups, 3 of them have stops that are between1 to 2 points (ER2 speaking), while one i only need 1/2 point to know if the trade works or not and go the other way. I don't get stopped often on this one because it has 2 possibility (2 trades), one up or one down. If market gives me neither, I pass. So I hit 50-50, I still come out ahead due to higher RR. Plus this one come at most once everyday or every other day. The 1/2 point setup has a between 1-2 point target (sometimes higher like today) while the others with larger stops have a larger target as well. The RR is about 2.5:1 if not higher. The 1/2 pt stop setup has larger RR.

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What i read at the beginning of the post when that little formula was put up was that a trader should aim for a reasonable point target (+10) and trade more contracts to make the $ profit.

 

For me this sounds like a recipe for suicide! An inexperienced trader which runs a 10 point stop loss (very popular) to aim for a 10 point gain is running a 1:1 RR. A noobie trader will have very few defined setups as well and will be just trading on a whim, so they are most likely going to blow up an account really fast by trading more contracts. If you're chasing only +10 you'd use a

-5 stop and spend more time getting your entry technique right so that you have over 50% chance of making your 10 so you can in the long run make your profits.

 

I read a post in another thread where someone said that you should only add in 1 extra contract for every minimum account size balance that you add to your own. I.E: if you have 5k trade 1 contract, then at 10k trade 2 contracts, at 15k trade 3 contracts etc... I like this idea very much, because by the time you build up 5k from trading only 1 contract at a time (if your taking 10 every day with no losses at all then this would take you almost 6 months on the YM), you'll learn how to identify your setups over time and develop your system.

 

Rushing in with the express idea of making fast bucks is a recipe for disaster.

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Guest cooter

Blowfish,

 

Does your ego think that you are better than the markets, or that the markets "owe" you more $$$, so you trade more or overcapitalize your next trades?

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Blowfish,

 

Does your ego think that you are better than the markets, or that the markets "owe" you more $$$, so you trade more or overcapitalize your next trades?

 

Its a couple of things I guess. Its looking for some sort of affirmation/validation through the markets. The old adage 'would you rather be right or rich'. Obviously (or maybe not) I would rather be 'rich'. The ego of course would rather be right and screw the making money. For me this manifests itself through closing trades too early perhaps before the 10 ticks/pips! This allows the ego to be 'right' but certainly adversely affects the bottom line.

 

I am lucky enough to have retired from my previous profession enjoying some moderate success. I think I am looking for some sort of 'validation' through the markets to replace what I got there. Ironically one of the reasons I was paid so well was that I was not fearful of making decisions they would all be right at the time and if later proved wrong they would be reversed re-worked replaced whatever it took. A fine ethos for trading. I knew I was damn good and I just did it. The ironic part is I find it much much harder to do this trading! Of course I know to be 'right' all I need to do is stick with the plan and that it is nothing to do with any particular trades outcome.

 

I really have what I think is a good solid and more importantly realistic view of what the markets are and how they work. Intellectually I know there is no room for my ego.

 

Anyway that will do for now. I re-read Zen in the markets by Eddie Toppel recently. A great little book - he promotes the idea that most trading errors are due to ego and that to really experience real success and get in the 'flow' you must completely eliminate it from your trading. I don't share all his views but it was Eddie that first turned me on to the idea that the ego was at the root of many trading errors.

 

Cheers.

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In the VSA thread, PivotProfiler wrote the compelling post, which I've snipped here, as I didn't want to clutter that thread with my musings:

 

 

 

Substitute ticks for pips, and say, the ER2 Russell e-mini for your favorite spot forex, and it becomes apparent that this is potentially doable for any futures trader.

 

My simple question is... if netting 10 pips or ticks a day is all it takes to achieve immortality (or at least everlasting wealth), why is it so many traders are having issues doing so? Any thoughts?

 

What most newbies do not realize that trade does not consist of "take profit" only. I has a thing, called stop loss. What you gonna do when that highly-leveraged position of yours go against you?

 

No, you cannot make 10 pips a day consistently. And 10 pip target is ridiculous if you take into account that spreads are 2-4 pips, then the odds are heavily against you. And 10 pips is trading in the noise, totally unpredictable.

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