forex #14

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20 pips to 200 pips: Small Trades to Big Trades
and Somewhere in Between.
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There are FOUR different classifications of FOREX traders in
the market. Each one employing one of three different pip-
trading (profit-taking) styles.


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Sidenote: remember what a "pip" is?
We talked about this in Lesson #3,
but for a refresher: A pip is the last
number to the right in a currency
quote For example: If the EUR/USD
traded at 1.3335 this morning. The
"5" is the pip. If it moves to
1.3435, that would be a 100-pip move.
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There are the novice traders – the rookies, the ones who
don't learn from the "donkey" (see yesterday's lesson;
Lesson #13).


In addition to the novice traders, there are three other
levels of participation in the FOREX market: the dealers,
the institutional traders, and the advanced traders.


The DEALERS are the most powerful and they make the market,
setting prices and putting together deals.


The INSTITUTIONAL traders work in banks, wire firms, or
government agencies. They trade huge amounts of money at a
time, and the size of their trades gives them enormous
power.


Next, there are the ADVANCED traders. This group is
comprised of people from all across the world, sitting in
smaller investment firms, offices, or even their homes. You
can be a part of this group. In some cases, the ADVANCED
traders are the smartest group – trade for trade – than any
other group. Because they don't move a lot of money on each
trade, they don't have as much power as the institutional
players. Because their trades are brokered by the dealers,
they'll never have absolute trading power. But, because
there are so many novice traders – the advanced traders have
plenty of people that they can outrun. Your goal as a FOREX
investor is to aggressively take money out of the pockets of
the novice traders (those that don't educate themselves with
cutting-edge knowledge -- like the self-taught ebooks you
can instantly download at http://www.RapidForex.com


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Each of these different traders have different philosophies
about how many pips to go after.


(1) Some traders go after large pip targets -- from 50 to
500 (or more). They are often position traders, leaving
trades overnight - often for days. Usually they trade one
or two lots and use stops of around 50 to 100 pips.


(2) You have other traders that focus on daytrading (getting
in and out of a trade within one day, usually though within
hours) to get 10 to 20 pips trading one to a few lots.


(3) You also have another breed of trader that will trade
multiple lots to catch just 5 to 10 pips, usually within
minutes. For instance, trading 10 lots for 10 pips is an
equal profit to someone trading 1 lot for 100 pips. Both
would equal $1,000 profit, depending on which currency pair
was traded and assuming they were on a standard 100K account
(i.e., using 100:1 margin or putting up $1,000 to trade
$100,000 worth of currency). Traders who attempt to trim off
profits, within minutes, are usually called "Scalpers."


There is nothing wrong with trading with any of these
objectives in mind. In fact, it is good to be versatile in
your trading. They each have their pros and cons but, if
somebody gets consistent profits (more winners than losers)
with one or the other, then that one strategy should be
considered GOOD.


As you progress from ROOKIE to ADVANCED trader you will
figure out your personal preference and tolerance for risk.


Most of the courses we have for sale at RapidForex.com
(especially the "Forex Surfing" and the "Forex Scalping"
courses) teach you to shoot for 10 to 20 pips PER TRADE.
It's as simple as this: We don't try to make a ton of money
on each trade (excessive GREED), and we never try to get
revenge (a lot of traders get creamed in the market and then
want to strike back. So they double their last order and go
for broke).


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Yes, You can Replace Your Full-time
Income and Make Over 5-figures a
Month On Just 10 to 20 pips Per Trade
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Generally, the larger the pip target you are shooting for
the greater will be the chance that the market will turn
around on you before it reaches your target. Conversely, the
smaller the pip target you are shooting for the greater will
be the chance of the market reaching your target.


All things considered equal, there is a greater chance that
you'll successfully pull 10-20 pips out of the market than
50 pips, or even 30 pips. The further out you go the more
likely it becomes that the market will change its mind.


In our "Forex Surfing" course we give you many ideas and
trading techniques to consistently capture 10 to 20 pips per
trade, per day. And, once you get good at doing that, then
the sky's the limit. We teach you how to compound your
gains, scale in and out of trades and a lot of other ways to
trade like the Traders who shoot for 40 pips per trade, but
without all the risk.