A wise man once told me "if you can make 20 pips a day you'll become a rich man." The power in this statement lies in the mindset of thinking about your earnings as a percentage instead of an exact dollar figure.  If you have a good money management system then you should be increasing the amount you trade based on your account size. For example say you have a $5,000 account and are trading 1 mini lot. A 20 pip day would equal you $20. However if your trading with an account of say $20,000 then that one mini lot bet will probably be more like 4 or 5 mini lots. If your sticking to that same plan of making 20 pips a day, instead of $20 dollars, you are now making $80-$100 per day. Let's do some quick math, if there are about 20 trading days in the month and you're making $100 a day then suddenly you find yourself making $2,000 a month which would equal $24,000 a year.  It's all about compounding.  Then if you would like to go even further into the rabbits hole. if you are making $24,000 a year and are working on growing your account rather than cashing out all of your profit each month you would now have doubled your account. Since you're now trading with a $40,000 account (to make things easy) you can now trade with (or close to) a full standard lot which is 10mini's. Now that 20 pips per day gets you double what you were making before. Of course this method means nothing if you don't have a well planned out money management system. Having a planned out system is very important because if you just add to what you trade without protecting yourself then you can have one loss that wipes you out and puts you back to square one. 

The point is to not be compared with the exact dollar amount when first becoming a trader. this will drive you to get greedy and over trade and ultimately lose. Or even worse, have a streak of great wins just to see it blown up by one or two bad trades. Think for the future. Think to yourself "this may only be a $20 winner today, but a year from now, the same exact trade will be $50, and in 5 years this same trade will be worth $200."  The money will eventually come. But if you properly prepare yourself now, then all you have to do is the same exact thing and get a bigger payout. Think of it as a yearly raise for doing the exact same thing that you've been doing. 
3/24/2011 10:52:14 am

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