Gidday

I understand the rule, but am having trouble applying it in the forex market.

Could someone please explain it with an example.



Cheers

Beno

what kind of rule ?

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Forex Indicators Collection

Don't know about 72 rule..but Murphy's law applies to any market very well....

Here are a few links.

The Rule of 72 is a way of working out how long it will take for your investment to double.
that's all well and good if you have a fixed interest rate and a some cash to invest as most of the web sites show.

but how can we apply this to forex trading?


http://ruleof72.org/
What is the 'rule of 72'?

HOW? WHEN you can guarantee fix monthly rate in forex market? or daily rate?
CAN you do it now?
if you can ,and whenever you can , then your equity will be double in specific time .

Here are some ideas

What percentage do we need to make per month to double our account in 1 year.


72/12 = 6%

so in theory if we make 6% per month we will double in that given period.

that same could be true for making 6% per day, you could double your money in 12 days.

not taking into account incorrect signals, power outages etc.

If you have a system that is consistant 3% gain per month you can use this to work out how long it will take to double you money.

72/3% = 24
so if you remain consistant you will double your money in 24 months.


Cheers

Beno

Bruno,
I know all about rule of 72, I am a financial advisor.
For Forex it is not a % thing it is a pip thing.
Here is an example, supposing that you that you stay conservative with a 3% risk:
Account side doesn’t matter, consider at the principle
Account: $1000 you make a profit of 30 pips at 0.1  $30
Profit/account = 30/1000=3% gain in 1 trade (and that could be done in 5 min)
So will you double your money after 24 trades? It is possible but very unlikely because you have to win all the trades.

So here is going to be your challenge: Find a system that produces consistency week after week and if so, yes you can work out your formula.

First try with something very small: 10 pips per day, which is about 200 pips per month. Depending on how you do things, that is about 20% per month !

So now you will look back at your original 3% from your question and start to be greedy and wanting more…and more lose trades will come… welcome to Forex.

Good luck with your trading !