Warm July greetings to everyone! Today we will talk about a comfortable trading style. Recently I witnessed a dispute between two traders. What’s better – one trade a day or ten? This is exactly what the two speculators wanted to find out. Each defended his point of view on the subject of the dispute. I do not know how their dispute ended, but I myself also thought about this question. The effectiveness of the trading process does not depend in any way on the number of transactions. That is, it cannot be that the more transactions, the more profit. Although, on the other hand, everything depends, to a greater extent, on the goals. If a trader opens an order with the aim of making a profit of 3 – 5 points, then one transaction will not earn much.
How much does one trade make?
This is the question of most concern to novice traders. Due to the presentation of information about trading on Forex from a certain angle, many have the impression of making a profit with one transaction. Rather, the Internet is replete with stories about ordinary students, taxi drivers or retirees who became rich in one deal. So people think that on Forex you can become a millionaire by making just one deal. In fact, this is far from the case. The profit from one trade depends on many factors. These are the lot size, distance in points, the cost of one point, the presence or absence of a commission, etc. Those who are after small moves do not expect large profits from the trade. On the contrary, speculators who trade in the medium or long term expect big profits. It also depends on the trader himself and his trading style.
Someone wants to see the result of their activities in the market immediately. Therefore, all trades are made at 1-minute intervals with small targets. I opened an order and in a few minutes you have a result. But this style of trading requires constant tension and stay at the terminal monitor. Someone does not have the ability or desire to constantly sit at the terminal. They are quite satisfied with one or two trades a day with a profit of 20-50 points in four-digit terms. And someone looks once or twice a week at the trading terminal. When it comes to trading with medium or long term goals. Accordingly, the target for such transactions is from 100 to 500 or more points.
Competent management of your capital
In the aforementioned dispute, the phrase slipped through that you can make good money with a large lot. If the target of the trade is 3-5 pips, but it is opened with a large lot, the profit will be good. Everything is correct. But only a loss will be good if everything goes wrong. Each market entry carries a high risk of losing funds. The more often we open trades, the more often we expose our money to the risk of loss. This, too, must always be remembered. If the size of the deposit allows you to trade a large lot, this is good. Just remember that the risk per trade should not exceed 1-3%. Everyone wants to quickly accelerate a small deposit to a comfortable size. But if you do not follow the rules of money management, acceleration of the deposit can turn into its drain. Subject to MM, the number of transactions per day does not really matter. It is better for a trader to trade in a comfortable environment. And he chooses these conditions for himself. As well as the number of transactions in one trading day.
Jul 14, 2021