Set Pips Targets?

[profitsniper]

Are set pips targets a good idea?

A lot of people say things like;

"Just get 20 pips a day"

The maths on this are pretty good, if you can get 20 pips a day - every day, 100 a week and 400 a month (incredibly harder than it sounds) you will make good money.

Is this the best way to trade the markets though?

I don't think so, I think if you have a 20 pips target, you are often leaving pips on the table.

I think your targets should be based on where you think the market is going - let the market tell you what profit objective to shoot for.

I have attached a chart where if you trade a strategy where you follow the daily trend and enter on a retrace and further breakout and use extensions to pick target, if you had went for 20 pips, you would have left a lot of pips on the table.

Surely if you are only going for 20 pips a day, you must have a tight R/R ratio - unless you have 5 pips stop and then you need some excellent entry skills.

This must require a superb winning ratio to be profitable over a period of a year or so?

 

[hayseed]

targets

hey sniper....... in the 2007 metaquotes contest, teamsky tripled their account with just a 6 pip profit target..... they traded the eurusd only, which has about 100 pips daily atr......

we all set targets differently..... for me, targets usually are reasonable atr's of the timeframe being traded....

this will of course, as you mentioned, will leave pips on the table..... but sometimes it's best to eat light and leave early..... very often the last guy at the table will get the bill......h

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[Fxpipper]

No not really. It is not a good idea, from the psychological impact when you do not achieve your goal to leaving pips on the table. Sure, one can play safe, fair enough. But if the market is headed in one direction and you're gaining pips, who on earth would want to walk away from that..

 

[Rambo35]

I think that is one of the reasons so many traders fail. They set a specific target they want to earn, but ignore how much they are able to learn. Set pips targets are terrible in my opinion.

 

[profitsniper]

hey sniper....... in the 2007 metaquotes contest, teamsky tripled their account with just a 6 pip profit target..... they traded the eurusd only, which has about 100 pips daily atr......

we all set targets differently..... for me, targets usually are reasonable atr's of the timeframe being traded....

this will of course, as you mentioned, will leave pips on the table..... but sometimes it's best to eat light and leave early..... very often the last guy at the table will get the bill......h

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I am not saying that it can't be done.

I just think that it takes a massive amount more skill to do so.

These guys obviously had a excellent strategy executed very well indeed (and very tight spreads I would think - tighter than the average retail customer gets)

but sometimes it's best to eat light and leave early..... very often the last guy at the table will get the bill......

I like that, well said my friend.

I also leave early, I like to be a front runner, if the tp can be 40 pips, I will take 35.

I still think it is better to let the market tell you what you can have rather than have a set pips target - certainly for my strategies.

My main question is about the R/R ratio, surely you need a excellent win rate to actually achieve this?

 

[profitsniper]

I think that is one of the reasons so many traders fail. They set a specific target they want to earn, but ignore how much they are able to learn. Set pips targets are terrible in my opinion.

Agree.

That and other reasons, but this certainly will not help a lot of people, in my opinion.

 

[profitsniper]

No not really. It is not a good idea, from the psychological impact when you do not achieve your goal to leaving pips on the table. Sure, one can play safe, fair enough. But if the market is headed in one direction and you're gaining pips, who on earth would want to walk away from that..

I don't think it's so much a psychological problem, I would think if you are a person that says;

"OK, I want 20 pips a day"

You get your 20 and are happy, close charts and go do something else.

It is the R/R I think will be the biggest problem, and also, if you can only have a 10 pips stop - or 20, this means you will be putting stops in retrace zones etc unless you get excellent entries.

 

[Rambo35]

I don't think it's so much a psychological problem, I would think if you are a person that says;

"OK, I want 20 pips a day"

You get your 20 and are happy, close charts and go do something else.

It is the R/R I think will be the biggest problem, and also, if you can only have a 10 pips stop - or 20, this means you will be putting stops in retrace zones etc unless you get excellent entries.

I think setting stop so close usually ends up in traders being stopped out way to early, but hey it comes down to strategy.

 

[Fxpipper]

Sure, you can always opt to leave early but if the market is headed in one direction (Re: Greek debt crisis) and the market starts reacting, would opt to enter positions, and set some to close when the target is reached and others, to ride the trend out.
As others pointed out, it all comes down to the strategy you use..