Setting profit targets in forex trading isn't one-size-fits-all; it's about aligning your goals with your strategy and account size. For instance, if I'm using a strategy with a high win rate of 70% to 80%, I aim for 3% to 4% of my account size per trade, factoring in risks. On the other hand, with a strategy winning 60% to 65% of the time, I'd lower my target to 1% or 2%.
Let's break it down with an example: Suppose I have a $10,000 account. With a high win rate strategy, I'd aim to make $300 to $400 per trade. If the strategy's win rate is lower, my target would be $100 to $200 per trade.
In terms of pip targets, I typically aim for 15 to 20 pips per trade. Most of my trades are closed once they hit this mark. However, I like to leave a small portion, say 20% to 30%, to run for potential larger gains
For instance, let's say I'm trading EUR/USD, and my entry point is at 1.1200. I target a 20-pip gain, so I'd aim to exit at 1.1220. But I keep a fraction of the position open to capture any further movement, like if the pair reaches 1.2250.
Ultimately, success in forex trading hinges on managing risks wisely and staying disciplined with profit targets. It's about finding that balance between ambition and realism, ensuring your trading remains sustainable and profitable in the long run.