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Is a 5 pip target realistic after costs?

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Shadow Trader
Posts: 5438
Joined: Wed Sep 09, 2026 5:19 pm

Is a 5 pip target realistic after costs?

Post by Shadow Trader »

Quick reality check for anyone running a 5 pip target on EURUSD.

Spread of 0.6, commission worth maybe 0.7 pips round trip, and a bit of slippage on the exit. That's roughly 1.5 pips gone before the market even has a say. A "5 pip winner" really banks 3.5, while a 5 pip loser costs 6.5. Suddenly the win rate needed just to break even jumps from 50% to something closer to 65%.

That's the maths nobody puts in the strategy thumbnail.

Plenty of scalpers survive this by picking cleaner sessions, trading only when spread is minimal, or stretching targets a little. Others quietly discover the edge was never there once costs were counted properly.

Here's a quick worked example with made-up but realistic numbers:

Gross target: 5.0 pips
Spread paid: 0.6 pips
Commission: 0.7 pips
Average slippage: 0.2 pips
Net winner: 3.5 pips

Gross stop: 5.0 pips
Same costs added on the way out: 1.5 pips
Net loser: 6.5 pips

Break-even win rate: 6.5 / (6.5 + 3.5) = 65%

Two out of three trades have to win just to stay level. Plenty of systems don't clear that bar once real fills enter the picture, which is why some scalpers move targets to 7 or 8 pips and accept a lower win rate.

Worth running the numbers on a real month of trades, not a backtest. What's the actual net pip result per trade after every cost, and how does it compare to what the strategy was supposed to deliver?
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