Currency pairs in the Forex market are very volatile. Market fluctuations enable Forex traders to profit from differences in the exchange rate. In this post, we’ll take a look at how many pips a Forex trader should target every single day.
The answer may surprise you!
How many pips a day is good?
10 to 15 pips a day is a really good target to achieve in day trading if you can do it consistently. A single pip can be worth $0.10, $1, $10, $100, or even $1000 depending on your lot size. If you can consistently make 10 pips with a winning strategy, trading large lot sizes can get you very high yields.
What is a pip in Forex trading?
In the Forex market, a pip stands for Percentage In Point or Price Interest Point. Currency pairs usually have 4 or 5 decimal places instead of the usual 2. In most pairs, 0.0001 unit of a currency is a pip. In Japanese Yen pairs, 0.01 Yen is a pip.
Forex trading is not spot trading. Instead, you’re doing leveraged trading, where the minimum amount of a currency you’ll buy will be 10,000 units. Here, the value of one pip will be roughly $0.10, depending on the currency pair you trade.
Is 15 pips a day good?
15 pips a day is great! If your trading strategy consistently nets you 10 pips per day, then you’ve struck gold. Currency markets are very volatile, and not everyone has the stomach to handle huge drawdowns.
While bigger trades are definitely possible and thousands of traders routinely take 50+ pip trades every single day, price goes through a lot of ups and downs to get to 50 pips.
Many times, your profit target will be 30+ pips away, and the trade will move 20-odd pips in your direction before turning on you and stopping you out.
My personal risk management strategy(which I learned from Raja Banks of WicksDontLie) is to secure a portion of my position at 10-12 pips and then let the rest of the trade run with the stop loss moved to zero pips.
My risk tolerance is very low and I am not able to handle drawdowns very well, so I try to take my 10-15 pips and call it a day.
Is 30 pips a day good?
If you can net 30 pips a day, then you’re amazing at forex trading. 30 pips can equal 3 dollars, 30 dollars, 300 dollars, $3000, $30,000, or even more.
How many pips do professional traders make?
There’s no fixed number of pips that professional traders make per day. Some traders do very well with taking super-small 3-4 pip trades, while other professional traders’ trading strategy involves taking swing trades that last a few days and run for 100s of pips.
Not all traders are the same, and not all trades are the same, either. You never know what the next trade holds for you.
Related: How to count pips in MT4
How many pips should you risk per trade?
You can risk any number of pips per trade as long as you’re getting a good return on your risk and you’re not going to lose too much of your capital if the trade goes against you.
For example, if you had a $1,000 account and you risked 10 pips in a 0.1 lot trade, you stand to lose $10 or 1% of your account.
If, on the same account size, you risked 100 pips in a 0.01 lot trade, you still stand to lose $10, or 1% of your account.
Instead of counting the number of pips to risk per trade, think in terms of the percent of your account.
Trading Forex can be incredibly lucrative, and there are professional traders out there making a very good living. Focus on consistency in your trading strategies and choose a currency pair that is volatile enough for your trading strategy to work.