If you consistently return 6% per month you will more than double your account in a year. Using a 30 pip stop, you would only have to earn 23 pips per week and less than 100 pips per month to achieve this goal.
Every small incremental move towards your end goal is a positive.
Trading is not a race, it is a journey that you should be enjoying.
To make a very respectable 10% per month using a 30 pip stop per trade and risking 2% per trade, you would only need to make 38 pips per week. 10% per month nearly triples your account in the span of a year.
These figures are all assuming that you are hitting these numbers consistently and you are not paying taxes out of your trading account.
If we take these same trades while reducing our stop loss to 20 pips instead of 30 pips, then we would only need to make 100 pips per month to earn 10%. The would reduce the 38 pips per week needed down to a mere 25 pips.
When we reduce the stop loss down to 15 pips, we would only need to make 19 pips per week or 75 pips per month in order to make a 10% return in one month. It is certainly possible to do this.
All this is done by spending a little more time on accuracy and reducing the stop loss. Nothing else changes.
If you can't do 23 pips a week or 90 pips a month using a 30 pip stop, then don't think for a moment that you can do it with a 15 pip stop. You need to be able to grow into it and it doesn't take long to do that. It only takes about 6 months.
If you can make 6% consistently for 6 months, then the only thing you need to change is your stop loss amount.
The only thing you are changing is the math.
20% per month is very phenomenal. If you want to make this much per month with a 30 pip stop loss, you would need to make 75 pips per week or 300 pips per month.
If we reduce our stop loss required to 20 pips, then we would only need to make 50 pips per week or 200 pips per month to net a 20% return in a month.
If we trim our stop loss to 15 pips per trade, then we would only need 38 pips per week or 150 pips per month in order to net a 20% return in 1 month. We are using a day traders model for entry in this scenario.
30% per month is absolutely astronomical. In order to accomplish this with a 30 pip stop we would need to make 113 pips per week or 450 pips per month.
If we trim our stop loss to 20 pips, we can accomplish 30% per month by making only 75 pips per week or 300 pips per month.
If we trim our stop loss to 15 pips, we can accomplish 30% per month by making only 56 pips per week or 225 pips per month.
Starting with a $5,000 account and making a consistent 30% per month, you would be at millionaire status in less than 24 months.
If you can make 56 pips per week you will be able to hit the 30% return per month mark.
You need to find a trade that is 4/1 reward/risk ratio each week to 30% in a month using a 20 pip stop.
We like to round our support & resistance levels to institutional levels which is every 20 pips, but we can also use the 5 levels as well.
Below is an example of a GBP/USD trade that could have given you an 8/1 reward/risk ratio using a 15 pip stop loss.
You don't need to shoot for the stars, you should be focusing on 4/1 reward/risk setups and that is wealth building. That is highlighted in the image below. 4/1 setups builds millionaire's.
This was all done inside of 1 day.
The daily and weekly charts are most important charts because those are the charts that the institutions tend to focus on.
It is a very important lesson to be able to recoup losses you had in a week even if you don't end up making any money on the week.
