Both of the expert methods aim for 300-400 pips per month, or more, with low risk and relatively low leverage. This enables you to enter the market with a higher degree of confidence and less risk of losing.

However, with all trading systems, there are periods of drawdowns. (Losses in the market) This cannot be avoided, and the best traders realise that drawdowns are part of the trading business and they must be accommodated.

Always allow for drawdowns equal to or slightly higher than the monthly profit average. If the system is gaining 400 pips per month on average, allow for periods when the drawdowns are up to 400 pips, or to be safe, 500 pips. A 500 pip drawdown at 1:1 leverage is equal to 5% of your account.

Leverage is a double edged sword. Remember that a gain of 500 pips at 5:1 leverage is a 25% gain on your account. But conversely, a 500 pip drawdown is a loss of 25% of your account. We recommend never using more than 5:1 leverage, or lower. This allows you to gain up to 25% per month on your account, without risking more than 25% during any particular drawdown period. Read more about this in the chapter on money management below.