Keep Your Expectations Realistic
Many times I hear from new traders who state that their goal is to make a certain number of pips every day. While it is important to establish goals in any endeavor, any benchmarks should be geared around your improvement as a trader and not about what you expect the market to give you. I have seen many new traders who while looking for at least 20 pips a day, end up losing big in an effort to reach this plateau.
The problem is that the market environment can change to the point where there are many days where solid trading opportunities just cannot be found.
So the new trader puts on a trade that they normally would not even think about. If that trade becomes a loser, they now have to win that loss back and then another 20 pips before the end of the day. You can see how this can turn into a nightmare after a couple of questionable setups end up as losing trades in the same day.
I think a better goal is to strive to be profitable every month.
If you end up with $1 more in your account at the end of the month from the beginning of the month, give yourself a pat on the back for being profitable. It is a series of monthly gains that can result in big returns. But you must treat trading as a business instead of a get rich quick scheme and keep your expectations realistic.
The DailyFX Trading Course can help by offering some excellent material on Money Management, including four different videos on the subject. The course is free for live FXCM clients and can be found at this link:
The login is the same you use to access your live FXCM account. Good luck with your trading!
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