Why I’m Not Worried About A Slow Start To My Forex Trading In 2009

As of right now, I am currently up a couple of pips for January with two open trades that add up to a few more pips.  I know traders that would be disappointed that they didn’t make 1000 pips so far at the beginning of the new year.  I am in no way worried about my trading as I will try to convince you in the rest of this article.

You don’t need to make 1000 pips a month to be successful.

This may come as a surprise to some of you, so I am going to break down the numbers of how many pips you would have to make in a year to produce a nice steady return on your investment.  Take a look at the equation I have outlined below as I show you that it’s ok to make a few pips a month or year and you’ll do just fine.

Starting Account:   $10,000

Leverage:   1:100

Percent risked per trade:  5%

If you were to make 100 pips:   +$500

Percent return on your investment:  5% for the year

Are you guys seeing the pattern here?  All you would need to do basically is make 100 pips for 5% return, 200 pips for a 10% return, 300 pips for a 15% return.  A 300 pip return in a year only equates to 25 pips per month on your initial $10,000 investment.

Now this equation doesn’t even taken into account that you can compound your winnings and should continue to invest 5% per trade as the example shows.

And this is why I don’t worry about what has already been a slow January for me.  If I were to close both of my open trades right now, I would have around 68 pips for the month of January.  If I could do that every month it would add up to an annualized 816 pips, which would equate to around ~$4320 return on $10,000 for a 43% gain.  Hot diggity!!!  I’ll take that any day in these times.

As I become more mature as a trader, I learn that forex can only be a lasting investment strategy if you continue to keep your emotions and reality in check.  So be happy with 25 pips per month and watch your returns beat every single value investor for years to come.

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