Comments on: How many pips do you make?

By: John

John — Wed, 04 Feb 2009 12:42:33 +0000

Brian – You’re missing the point of the post. If all you’re doing is a self-comparisson where you know how much you’re risking and all of that, then by all means think in pips. You make good points about not getting caught up in the monetary value of it all (though I personally favor thinking in % terms rather than pip/point or $ terms when evaluating my performance). My argument here, though, is about how talking pips with other traders – unless they trade the same thing the same way as you – is meaningless. It leaves too much out.

If you tell me you made 1000 pips my response is going to be “And…..?” I don’t know if that’s good or not. How many trades did it take for you to get there? How much portfolio risk did you take? What kind of % return was that on your account? Without knowing the extra details I can’t judge whether you’re doing well, taking crazy risk, not risking enough, having to put too much effort into your performance, or any of the other ways I might come to a conclusion about your trading performance.

By: brian

brian — Wed, 04 Feb 2009 05:17:31 +0000

You are idiots if you think pips don’t matter. Pips are all that matter. Do you think you need to make different trade if you have a lot of 10,000 or 10,000,000. you would make the same trade. why would you think any different. if you start out trading with the smallest lot and you make 100 pips per week why would you trade differently if you where using a much larger lot. the best thing to do is not trade your money but trade the market. don’t even look at your profit/loss. just look at the market and trade accordingly. if you trade money you might get out of a trade early because you make enough money and that is stupid. if you just trade the market and get the most out of each move, and trade that you make you will be a better trader. you don’t have to make special trades to make millions of dollars you just have to be consistent in the pips and the money will come.

By: John

John — Thu, 15 Feb 2007 18:24:13 +0000

Leonardo,

You actually make my point on the one side. You are speaking of a price move. I’ve got no problem for using pips in that regard.

There is a huge difference, though, when you present 1000 pips as your performance. You caught a big move. Great. Your leverage, though, matters enormously.

If you were trading GBP/USD, for example, a 1000 pip move is only around 5%. With no leverage that’s a fairly paltry return. I wouldn’t be patting you on the back. Similarly, if you were leveraged to the hilt I’d more likely call you lucky for not blowing up your account.

The bigger point of the post is that traders too often throw pips out there as a performance measure in situations where no real comparisson can be made. You normally don’t hear their trade frequency or holding periods, so you can’t directly compare it to anything meaningful. They don’t tell you what risk they were taking, so again you can’t really judge the value of their performance.

My favorite is when someone says “my method made X pips this week”, but when you look at the actual results you see that they were counting pips from simultaneous positions in different pairs like long EUR/USD and long GBP/USD. That means either you had to have a double USD risk or you need to cut the pip results in half.

By: leonardo Cecchini

leonardo Cecchini — Thu, 15 Feb 2007 17:54:12 +0000

that said, being able to capture a 1000 ‘absolute’ pip move, regardless of the cross used, is a feat onto itself. Sure it doesn’t tell you the dollar value of the position but the question that should be asked is ‘how did you do it?’. It would then be up to you to decide how much leverage to apply to maximise you potential dollar gain. If you can identify such a potential move, it should not matter if you are applying leverage or not. 1000 pips is 1000 pips after all