How to make 100 pips per week
In today’s lesson I am going to show you how you could possibly make 100% on your trading account in one year by only trading one time a week. Sound too good to be true?
Well, it’s not, and if you simply learn to trade like a sniper instead of a machine-gunner, and manage your money properly on every trade you take, you could approximately double your trading account in one year using solid money management.
That is obviously not a guarantee or a promise, but I am going to teach you today that by simply being disciplined and following a well thought-out trading plan you could make a very decent return each year in the markets. I must inform all of you that this lesson provides examples of aggressive money management tactics, thus I strongly suggest each trader decide how much money they want to risk per trade according to their own risk tolerance and personal circumstances.
In reality, it would be hard to double a small trading account without taking risks, but as we all know, without risks there is no gains. Just do me a favor and don’t rush out and start trading this strategy until you’re confident and fully understand it.
The main points to consider in today’s lesson are the following:
1) Focusing on quality of trades over quantity of trades is the quickest way to make money in the markets.
2) By preparing your trading strategy and trading plan before you begin trading with real money you will put the odds of success in your favor while diminishing the chances of becoming an emotional trader who loses money.
3) The keys to making the one-trade-per-week strategy work for you are being disciplined and patient.
The 1 trade per week strategy: Example
Let’s first take a look at the math behind the 1 trade per week strategy to see how it can lead to a very decent yearly return.
Remember, this strategy is about trading with patience, if you do not believe that being a patient trader can pay off in the long-term; all you need to do is look at the examples below:
Please Note that your starting capital /account balance and what you decide to risk per trade can be ‘any figure’ you choose and are comfortable with.
Some people may be more aggresive and some people may be more conservative with their capital risk management.
Please understand that you should only risk an amount per trade that you are completely comfortable with. I will say that many people teaching forex promote 2% risk per trade, I DON’T agree or believe that 2% is enough risk per trade to make any amount of substantial money long term with this particular strategy. The below figures are just an example of how placing one trader per week could grow your account using several different risk reward and win rate scenarios.
Starting account balance = $5,000
Number of trades per week = 1 (average over one year period)
Risk / Reward per trade = 1:2
Risk per trade = $500
Reward per trade = $1,000
Assumed winning percentage = 40%
Assumed losing percentage = 60%
52 trades in a year =
52 x .40% winning trades = 20.8 winning trades
52 x .60% losing trades = 31.2 losing trades
So, let’s say 21 winners and 31 losers over the course of a year.
21 x 1,000 = $21,000 profit
31 x 500 = $15,500 loss
Total profit = $5,500 (110% return)
So, we can see in the above example that if you only traded 52 times in a year (1 time a week on average) and you used a risk reward of 1:2 on every trade while winning 40% of the time and losing 60% of the time, you have made a $5,500 profit on a $5,000 starting balance over the course of a year.
This is a 110% return on your investment over a one year period, a very acceptable return by any professional’s standards.
Of course, you can always aim for more than 1:2 risk reward and this will actually allow you to trade even less frequently than once a week or have a losing percentage over 60% and STILL be profitable.
For example (assuming risk of $500 and reward of $1,500):
52 trades: 36 losers and 16 winners = 70% losing rate and 30% winning rate (approximate):
1:3 risk reward:
16 winners x 1,500 = $24,000
36 losers x 500 = $18,000
Total profit = $6000 (120% return)
Now, let’s dissect this a bit so that you understand the significance of these examples. Note that in both of the examples above you could have made over 100% on your trading account in one year by just trading 1 time a week.
I’m willing to bet if you go look at your trading account history right now you have executed way more than 52 trades in the last year.
In fact, some of you have probably executed 52 trades just this week or month.
In the second example we see that if you have a risk reward of 1:3 you can actually lose on 70% of your trades and STILL make a 120% return on the year! Just so you guys know, making 100% on a trading account in a year is up in the realm of top-performing hedge-fund managers and bank traders.
From $200 to $1000 Trading Forex Mission (DAY 2 RESULTS)
(Read my Forex money management article to learn why I measure risk in dollars and not pips or percentages.) This strategy of only trading an average of once a week can really work for you if are willing to take the next steps…
How to make the 1 trade a week strategy work for you
It’s one thing to discuss a hypothetical example scenario, but it’s another thing to actually make it work for you in reality.
So, what do you need to do to really make the one trade a week strategy work for you?
The obvious trait that is required here is self-discipline.
You need to be disciplined enough to only trade the most obvious trade setup each week, and this might mean you don’t trade at all some weeks. Also, you may have to endure strings of multiple losing trades, so you need to have the discipline to not over-trade or over-leverage even if you have just had 5 losing trades in a row. You must understand that we are leveraging the power of risk reward combined with a mastery of your trading strategy to make money, but since we never know which trades will win and which trades will lose, we have to have discipline to remain calm and follow our plan even in the face of inevitable strings of losing trades.
The point here is that you want to think longer-term about your trading and try and set an approximate goal of only trading 4 times a month, which will result in about 52 trades a year.
Remember, this is not a concrete trading rule; I am just trying to show you that by trading less frequently than you probably are right now you can make a very decent return by learning to be a disciplined price action trader.
Next, you need to have patience to make the one trade a week strategy work for you.
Perhaps the best way to become a patient trader is to master one Forex strategy at a time, this way you will have total confidence in your trading ability and you will know exactly what you are looking for in the market.
When you know what you are looking for in the markets there is no reason not to wait for your trading edge to appear, other than being an emotional trader. Thus by thoroughly mastering an effective trading strategy like price action you will naturally infuse a certain amount of patience into your trading mindset.
However, you must do more if you want to make patience a permanent part of your trading mindset; you must make a conscious effort to be a patient trader until it becomes a habitual part of your trading routine.
The best way to do this is to create a Forex trading plan around the one trade a week strategy, this will give you a tangible reminder of what you overall approach is for trading the markets and will work to continually reinforce what you need to do to reach your trading goals.
Questions and Answers:
Before we end today’s lesson I want to answer two questions that I get a lot of emails about and that I’m sure many of you will have regarding this article, so here goes:
Q: Won’t it be difficult to make a lot of money only trading once a week?
A: What is a lot of money to you?
Is a 100% return in one year a lot of money to you?
Obviously, if you have a $500 trading account a 100% return is only $500, not really a lot of money. However, if you have a $25,000 trading account than a 100% return is $25,000 in a year, this is a decent chunk of change to make for only trading an average of once a week.
But, if you are trying to get rich quick in Forex you are probably only going to lose your money even quicker.
You need to understand now that the way you make money in the markets on a consistent basis is by learning to trade like a sniper and not a machine gunner.
Yes, your account size does limit the amount of money you can expect to make in a year. But if you can grow your trading account 100% in a year, you will have no problem finding people to fund you. You HAVE TO manage your risk effectively on every trade otherwise you will lose all your money before you give your edge a chance to play out in the market.
Q: I don’t have enough money to only trade once a week, what do I do?
A: This is a question I get often.
It seems that many beginning traders equate trading smaller time frames with being the necessary course of action for trading a small account.
In fact, traders with small accounts need to trade higher time frames more than traders with large accounts. The reason is that the lower time frames are naturally going to have more false signals and whipsaws, this is going to cause you to over-trade and (or) over-leverage, and on a small account it does not take long to have a full account blow-out once you start over-trading and over-leveraging.
Remember that trading more does not mean you are going to make more money, trading less frequently but with more precision gives you a better chance.
I can assure you that thinking you are going to make money faster by trading a small account on the small time frames is probably the fastest way to losing your money in the markets. I believe aspiring traders need to learn how to trade the daily charts first, as they reflect the most practical and accurate view of the market for my price action trading strategies, as well as act as a natural filter for the random market noise of the lower time frames.
If you would like to learn more about the ‘one trade per week trading style’ and other concepts discussed in today’s lesson – please check out my price action trading course and members’ community here.
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About Nial FullerNial Fuller is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading.
He has a monthly readership of 250,000+ traders and has taught 20,000+ students since 2008. In 2016, Nial won the Million Dollar Trader Competition.
Checkout Nial's Professional Trading Course here.