Can I trade a system win only 0.7-0.9 pip per trade on forex?

Discussion in 'Trading' started by tzlf, Mar 24, 2007.

  1. tzlf


    Hello, everyone. I am a trading system developer, I had developed various indicators and automated trading systems for futures market and forex market. In the latest years I reach a trading system for forex market. The system is a super short term trader, it enter the market for only a few seconds to a few minutes and then exit. Statistics show that the average profit per trade is about 0.7-0.9 pip on EUR/USD, depends on system setup. The system generates a few hundreds trades a day. The stability of the system is excellent, as I'd performed a lot of validation test with out of sample data, it turns out that it perform nearly as well as with the sample data.

    So, current the problem is the average profit per trade is a little low, at least for an individual trader like me. because the 0.7-0.9 pip per trade don't consider spread, all retail forex broker's spread is above 1 pip. But is very likely that a system like this may work for some institution traders, because the spread of interbank forex market can be as low as 0.5 pip. Because I dont know much of the interbank forex market, any advice is welcomed.
  2. No... slippage, the fact that in the future it won't perform as well in the past, and spreads/commissions will make it a money loser. .7-.9 pips just doesn't give any room for market changes or problems you'll inevitably encounter.
  3. I can think of no faster a way to transfer money from your account to your broker. Even if you were to obtain a 1/2 pip spread in the interbank market (highly unlikely), slippage would destroy this strategy immediately. Try shooting for an average trade of at least 10-15 pips to account for spreads and slippage and deterioration of your strategy. Anything less than this is essentially a recipe for disaster...