So, what is better to make 1,000 pips once in a while or to make 10 pips every day?
Yes, this is a tricky question. But the way you answer this question defines your trading strategy.
You can base your trading strategy on going for a big win or you can base it on winning small but often. In a baseball analogy that would be going for a home run as opposed to scoring single runs over and over again. Both of these strategies are valid and can make you money if used properly. Which one you choose depends on your personality and circumstances.
The downside for the “big win” strategy is that most of the time you have to endure strings of small losses before you hit that home run. These small losses might wear you down both financially and emotionally much sooner than you get to the big win.
The downside for the “small win” strategy is that most people want to get rich today and just can’t wait till tomorrow, let alone the day after.
After many years of trying different strategies and losing thousands of dollars, I became a big fan of making small profits consistently. The keyword here is consistency. The consistency will allow you to calculate your risk/reward precisely, which in turn will allow you to make more money per trade.
Do not forget that making 10 pips per day means making $10, $100, $1,000 or any other amount per day depending on your account size (click here for the pip explanation)
Making just 10 pips per day and using the great power of compound interest will make you rich in almost no time.