Forex trading is one of the most lucrative and profitable financial investment options available today. However, it can be challenging for traders, especially those who are new to the market. One of the most common misconceptions in forex trading is that making 10 pips a day is easy. In a demo account, it may seem like a piece of cake, but in reality, it is not as easy as it seems.
What are pips?
Before we discuss why making 10 pips a day is not easy, it is important to understand what pips are. A pip is the smallest unit of measurement used in forex trading. It stands for “percentage in point” and represents the change in the exchange rate of a currency pair. In most currency pairs, a pip is equivalent to 0.0001 or 1/100th of a percent. For example, if the EUR/USD currency pair moves from 1.2000 to 1.2001, it has moved one pip.
Why is 10 pips a day a popular goal?
In the forex trading community, 10 pips a day is a popular goal for traders. This is because it seems like a small and achievable target. Traders believe that if they can make 10 pips a day, they can make a significant profit over time. However, this is not always the case.
Why does 10 pips a day seem easy in demo forex?
In a demo forex account, making 10 pips a day may seem easy. This is because the demo account is not a real trading environment. It is a simulation of the real market, and the prices are not real-time. Therefore, traders can easily execute trades and make profits without any real consequences.
Moreover, in a demo account, traders do not experience the emotional and psychological pressure that comes with real trading. They do not have to worry about losing real money or making mistakes that can cost them. This creates a false sense of security and can lead traders to believe that making 10 pips a day is easy.
Why is 10 pips a day not easy in real forex trading?
In real forex trading, making 10 pips a day is not easy. This is because the market is unpredictable, and prices can fluctuate rapidly. Traders have to constantly monitor the market and make quick decisions based on the information available. They also have to manage their emotions and avoid making impulsive decisions.
Moreover, making 10 pips a day consistently requires a lot of knowledge, skills, and experience. Traders have to understand the market trends, technical analysis, and fundamental analysis. They also have to have a solid trading strategy and risk management plan.
In addition, traders have to deal with several external factors that can affect the market, such as economic events, political issues, and global crises. These factors can cause sudden and unexpected price movements, making it difficult for traders to make consistent profits.
Conclusion
In conclusion, making 10 pips a day in forex trading may seem easy in a demo account, but it is not the case in real trading. Traders have to deal with several challenges and external factors that can affect their profits. Therefore, it is important for traders to have a solid understanding of the market and the necessary knowledge, skills, and experience to make consistent profits. They also have to manage their emotions and avoid making impulsive decisions. Overall, making 10 pips a day is a challenging goal that requires a lot of hard work and dedication.
