Listen Up
It’s not meant to be a rhetorical
question. So yea, that’s why you trade or that’s why you want to trade, or that’s
why you want me to manage some funds for you.
Now, if you are familiar with my
work, and have read some of my stuff, you know I am paranoid when it comes to
risk. I want the most from risking the least.
Some months ago, I wrote a
computer program in Python that deals with projections from trading. If you
were to do the calculations by hand, with calculator, it would take you many
hours and reams of paper. Now, I have known the data I’m going to share with
you for many years; as a young pup trader it was drilled into my head by my
mentor Burt, as well as veterans from the trading floor.
Here’s the first vital question I
want to ask; with normal volatility and leverage, how many pips on average can
I expect to reasonably make from a day of trading? When you consider that
average daily ranges are between 80 – 130 pips, is making 10 pips unreasonable?
No, I think it is entirely doable [all daily profits and losses averaged over
time].
Here’s the second vital question I
want to ask; what size leverage should I use? Being conservative, I would say
between 5X-8X on the low side to 15X-20X on the high side; nothing past that.
Given the criteria above, let’s
look at what happens when you make 10 pips per day [average] and use
conservative leverage [8X]. Since Forex FS requires a minimum deposit of USD
$500 to open an account, let’s go with that figure for an opening balance.
Now, do you remember 6 years ago?
Unless you are in your early twenties, 6 years for most of us seems like a
heartbeat. I remember fraternity pranks from 40 years ago like they were
yesterday; please, 6 years ain’t nothing.
So, now that you have your trading
goals laid out, what does your account look like at the end of 6 years,
assuming you didn’t add or withdraw any monies and maintained constant 8X
leverage along the way? How about $ 1.3 MILLION !!
If you started with $1,000 it
would be $2.9 MILLION !!
If you started with $500 and
averaged 11 pips [instead of 10] it would be $3.0 MILLION !!
If you started with $1,000 and
averaged 11 pips [instead of 10] it would be $6.5 MILLION !!
Can you see why every pip matters?
Can you see why NOT losing is as important as winning for your average
pips?
AND HERE IS THE KICKER ……
These figures already take into
account my incentive fee of 30% along the way: they are NET figures.
Now, this doesn’t mean that when I
trade I panic and hit the liquidate button when I see 10 pips. What it does
mean is that I know the importance of every pip in trading and that all those
people who taught me were right. Every day I make more than 10 pips, it gets
everybody closer that much faster!
So, for all of you people out
there who are not in my PAMM, you should be if you want these kind of results.
Now, I know there are people that are going to say, “Well yea, but what if you have a mediocre month or two”? OK, so
what? It takes a few extra weeks to get where you want to go – where else are
you going with complete funds safety and total 100% transparency?
Of course, nothing in markets or
trading is guaranteed; you already know that. I don’t look for guarantees, I
look for opportunity. So, no matter what your age is, or what you do for a
living, you probably have goals and dreams that need to be funded.
My question to you is this: what
are you waiting for because you are only a few years out from changing your
life.
Going into today’s trade, I knew
the event of the day would be the retail sales report at 7:30 A.M. [Chicago time] and that
anything I did prior to that could be wiped out in a second when the report was
released. Overall, I did 3 trades today [all in EURUSD] and made a fraction
over 8 pips.
The algorithm buy signals I didn’t
trust that much because they came at higher levels in a market that is decidedly
bearish towards EURUSD. I didn’t make as much as I would have liked, but
hindsight is always 20/20. For the day then, we made about 0.4%.
Daily Recap
Start NAV 1.0119
P/L: 0.4269%
End NAV 1.0162
For those of you that would like
to participate in the PAMM, email me at
vegasxau@ymail.com
for details.
Have a good day everyone.
-vegas
