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Recently, many
beginning forex traders asked me, "Chriis, how many pips should I make per
month to go full-time in forex trading?"
I
don't know where and whom they get this misconception from, that making a
certain amount of pips in a certain period of time is the admission ticket to
full-time trading.
The
truth is, it doesn't work that way.
I
know. Countless articles have discussed this topic. However, most of them
(almost all of them) didn't manage to scratch the itch. And the point they make
can be summed up to:
"Can
you even make 100 pips per week?"
How's
this going to help, huh?
Cut
the bullshit, and let me give you a new perspective today.
What's your pip value?
Let's
assume you can make 200 pips a week. But, what's the value per pip? How much is
every pip worth to you?
Remember
this. The pip value varies according to the lot size you trade.
Hypothetically,
you long one standard lot on the EURUSD trade, and you successfully make 200
pips off that trade. Now, you're making approximately $2000 since each pip in a
standard lot is worth $10.
Can you live off $2000 a week? Probably yes.
Let's consider another
scenario. You long one mini lot (0.1 standard lot) on the same trade. Again,
the market goes in your favour and you make 200 pips.
This
time, you're only making approximately $200 since each pip in a mini lot is
only worth $1.
Can
you live off $200 a week? Hmm...
See,
your profit will further diminish to $20 if you trade a micro lot (0.01
standard lot) with each pip being worth only $0.10.
What?
$20 a week? Nah!
Did
you see how making the same 200 pips a week may give you different standards of
living?
It's not about how many pips you make. It's about how much you
make from the pips