Over the past few years of my trading career, I also had ups and downs on my trading. But that was when I always think big and target large. What changed from big to small , from losing to earning was to make trading easy and simple. We all already know that trading it self is a difficult yet confusing at times to understand whats going on.
IN reality, what is your aim in Trading ? OF course to Earn money. That’s right, we are here to earn and get some money from our job. Just like any other job out there. IN forex, its a different environment, its all about mentality and mindset. Its all about who is in control. BUt if you step back and think for a second, how much can you earn from something that moves 50 – 100 pip on average daily ?
If you think u can earn 100 pip on a single trade daily, be my guess. Show me if you can consistently. Other than scalping of course. Now if you reduce that to just a mere 5 pip, what are the chances of getting it in a move that averages even 50 pip. To even get 50 pip , the chances are 1/50. But to get 5 pip, the chances increases to 45/5 . Why ? because its achievable, small but profitable.
Over the course of a long run, it will deem turn your trade consistently profitable and positive. Again it will be a matter of MOney management on how much can you earn from just 5 pip. Its all about how confident and how good you are with market timing. Trading with experience does tend to have the edge to trade with full scale trading size.
Here is an example. You start with $2000 in your trading account. Your Weekly objective is 25 pip per week. SO each day is 5 pip. size to use ? Depends on your risk tolerance. I suggest you have 2 separate account. 1 account to act as your main account funds. The other to use it for trading. every profit u earn transfer it to the main account. Which leaves u the same capital and fix size on the trading account and the main funds increasingly with profit. Why do this, so you will trade without fear of losing your money!
Now with 5 pips and $ 1000 to trade risk it on a separate account leaves u the choices of taking 5% to 10% risk. with 10% risk , u gain 10% profit which leaves u 10 times of losing, burned account. with 5%, u get to risk 20 times of losing to burn it out. FOr a 5 pip trade on a single day, is achievable. so We use 5% risk .
5% of $1000 = $50. SO now my objective is to earn $50 profit per day or lose $50 -100 per day. So we will be using 1 Lot. Who cares ?! You are using separate account as trading and the other as your source of main funds. Meaning the $1000 you use is the amount u are willing to risk to lose.
Of course to get an ideal trading profit means u need a perfect timing market strategy. In this case I personally use Demand and Supply in my trading as a foundation. Demand and supply on a forex charts means you need to identify them well and these are actually institutional order flow.
Of course that will be a lot of practice or backtesting. Strategy is simple. Demand = Buying and Supply = selling. There is an order of odd enhancing scoring to identify a good supply demand level. I personally use as a checklist. I use this check list as identifying a good level to trade of 5 pip.
1. pattern ( demand and supply pattern )
2. Strength of imblance
3. Period at that level
4. Profit margin when it leave the level ( preferable 3:1 ratio but on a short term small time frame 1: 1 is acceptable )
6. Time of the day the level formed
7. USD index
8. Location on a bigger time frame
10. arrival of price into the level
GOAL – 5 pip
Strategy – Demand and supply
Chart time frame to use – 15 min / 5 min / 30 min.
I prefer 15 min chart
SL up to you according to your position size and risk.
Now lets go back to earning. $50 a trade in a single day is not bad. You get to earn 5% per day. After 5 days of trading $250 per week goes into your main funds. Use all over again on that $1000 trading account. repeat for the next 4 weeks, I am sure yo will have 100% return in a single month. Of course if everything goes smoothly as planned.
Once your main funds grow to $3000, take 500 into the trading account, now you have $1500 risk to trade. Increasing ur position size to 1.5 lot. Now You’ll be earning $75 per day. Repeat the same thing all over again.
Now for people that has seen how I trade it is very simple and easy. For those who has not yet understand what supply and demand trading is , you can search it on google typing’ Sam Seiden’. Watch all the videos there to understand what I am talking about.
Try it on demo, I insist. Use support resistance , its also reliable! Test it over a period of 3 months, see if you can manage to gain 300% on your account.