200 pips traders

[drasfs]

There are a couple of things that puzzle me. For instance, if you average 200 pips a month using 100:1 leverage and have 20 000 dollar in your account, and only use 5% of you account worth on every trade, you would earn 2000 dollar a month.

There are lots of people out there that achieve 200 pips a month, and even more and with a bigger account too. Are these people just secretive about their profits, or are these traders just rare, as many people who gain 200 pips a month fail to employ proper risk and money management. Or because they don’t have consistent results and fail to survive in the longer run?

 

[gkishot]

Quote from drasfs:

There are a couple of things that puzzle me. For instance, if you average 200 pips a month using 100:1 leverage and have 20 000 dollar in your account, and only use 5% of you account worth on every trade, you would earn 2000 dollar a month.

There are lots of people out there that achieve 200 pips a month, and even more and with a bigger account too. Are these people just secretive about their profits, or are these traders just rare, as many people who gain 200 pips a month fail to employ proper risk and money management. Or because they don’t have consistent results and fail to survive in the longer run?

Those people are rare & they do not like to brag about their profits.

 

[drasfs]

Well ive got the impression that there are lots of people that get 200 pips or more a month and just smiling secretly.

 

[mortysill]

Quote from drasfs:

There are a couple of things that puzzle me. For instance, if you average 200 pips a month using 100:1 leverage and have 20 000 dollar in your account, and only use 5% of you account worth on every trade, you would earn 2000 dollar a month.

Doesn't this mean using a 5 pip stop including the spread?

1. Leverage 100:1 - 20,000 * 100 = 2,000,000 ie 200 mini lots

2. Max equity at risk - 5% * 20,000 = 1,000

3. Max stop - 1000/200 = 5


I'm probably wrong.

My point is that using 100:1 leverage is a fast one-way ticket to the FX graveyard. If you had a 20 pip stop and you got stopped out twice in a row your 20,000 would become 12,000.

Best regards
Morty

 

[OddTrader]

Quote from drasfs:

There are a couple of things that puzzle me. For instance, if you average 200 pips a month using 100:1 leverage and have 20 000 dollar in your account, and only use 5% of you account worth on every trade, you would earn 2000 dollar a month.

There are lots of people out there that achieve 200 pips a month, and even more and with a bigger account too. Are these people just secretive about their profits, or are these traders just rare, as many people who gain 200 pips a month fail to employ proper risk and money management. Or because they don’t have consistent results and fail to survive in the longer run?

Never met any ET posters earning less than 200 pips a month!

 

[late apex]

Quote from mortysill:

Quote from drasfs:

There are a couple of things that puzzle me. For instance, if you average 200 pips a month using 100:1 leverage and have 20 000 dollar in your account, and only use 5% of you account worth on every trade, you would earn 2000 dollar a month.

Doesn't this mean using a 5 pip stop including the spread?

1. Leverage 100:1 - 20,000 * 100 = 2,000,000 ie 200 mini lots

2. Max equity at risk - 5% * 20,000 = 1,000

3. Max stop - 1000/200 = 5


I'm probably wrong.

My point is that using 100:1 leverage is a fast one-way ticket to the FX graveyard. If you had a 20 pip stop and you got stopped out twice in a row your 20,000 would become 12,000.

Best regards
Morty

Morty, you are absolutely correct that 100:1 leverage, either per trade entry or total across several correlated trade entries, is generally suicidal.

However, in the original example, I believe that 100:1 refers to the maximum available leverage at the account level. When you combine that with "only [using] 5% of you account worth on every trade", you get 5:1 leverage per trade entry.

With a $20,000 account and 5:1 leverage, each position size would be 1 lot = 10 mini-lots = 100,000 units, rather than 200 mini-lots = 2,000,000 units. The example did not specify "max equity at risk", so that the stop need not be 5 pips.