Determining the Pips to Target Per Day
It is not uncommon for forex traders to approach trading with the aim of collecting a certain number of pips a day from the market. Some might even consider adopting a strategy that only earns X number of pips per day. However, there are complications that arise from this approach and the setting of realistic goals.
Pip stands for point in percentage. A pip is the smallest unit of point to represent price changes in forex trading. Therefore, the accumulation of profits and losses during long positions following price movements in forex is also calculated in pips or in the plural, pips. The unit point value of pips varies, depending on the currency pair being traded at the current rate.
How Many Pips Do Professional Traders Make?
Professional traders don't trade with a certain number of pips in mind. This is because the market does not move in a predictable way, so traders cannot accumulate the targeted number of pips per trade.
The number of pips per day varies depending on the strategy adopted as well as the unique goals set by each individual. Certain strategies target smaller profits more frequently across multiple trades (scalping), while others look for large profit taking opportunities with a longer time horizon (position trading).
For example, one point on the EUR/USD pair will be different from the value of one pip point on the USD/JPY pair. If the count of one pip point the EUR/USD pair (1.1403) is the 4th number after the dot. While for one pip point the USD/JPY pair (105,670) is the 2nd number after the dot. For example, if the price of EUR/USD moves from 1.1403 to 1.1404 it will be a 1 pip move or "dot". Meanwhile, if the price of USD/JPY is 105,670 to 105,680, it becomes a 1 pip movement.
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