What everyone is trying to point out is that the solution being outlined is just as bad as the problem. You may have made 300% today on 180 pips, but I would almost guarantee your taking on more risk then your system can support. It's all about return on risk.
What are you risking to make that return? 1% of your account? 10%? 50%? If your risking even 5% of your account, without a wicked winrate, your going to get killed long before you have a chance to accumulate enough pips to mention. There is a very simple formula that is used to compare systems, and when you understand it your returns will begin to improve dramatically.
Lets use a hypothetical trading system, with 20 pip stoplosses and 40 pip takeprofits.
Start out by defining an R variable of 1. The 20 pip stoploss is equal to R1. That 20 pips can be 1% of your $100 account, 5 contracts times 20 pips, or the GDP of china. The metric you use to define R1 is irrelivant but R is always 1.
We need another variable called P. P is the multiple of Rs we win with a winning trade. Divide the number of pips you win on your average winner by the number of pips you lose on your average loser. In this case P is 2. 20/10=2
Now whats the winrate of the system? I don't know and neither do you. The only way you can figure it out is to test the system over 100+ trades. If you haven't done that, then there is no point in talking about how good or bad a system is. Because this is hypothetical, lets say after 200 trades our winrate is 60%.
Ready for for the solution to your problem?
Multiply P by the number of winners. 120 X 2 = 240
Multiply R by the number of losers. 80 x 1= 80
Subtract your net R from your net P. 240-80= 160
Then devide that number by the number of trades in the sample to find E or the expectancy of the system. 160/200= 0.8
That number is the key. What does it represent? The expected return your system will generate over a large sample of trades. You will make $0.80 for every $1 you risk.
It doesn't matter if you have a $1m account risking 0.1% or a $100 account risking 50%, that number won't change.
The last factor you need to look at is the frequency of trades. Our sample was 200 trades, so lets multiply our E times 200. 0.8X200= 160
That is your R multiple over 200 trades. We express that as 160R. But how long did it take you to make those 200 trades? A week? A month? A year? A system that generates 160R in 1 week is 52 times more profitable then one that generates 160R over 1 year. If you don't understand why, just do the math. I highly reccommend you try plugging in different variables to see how they perform.
So if you want to ask people a relevant question that might in fact help you to gauge your progress as a trader, ask them there average R over a given time period. If they can't answer it, their opinion isn't even worth hearing because they have no idea what their doing.
Luck be with you.
Note:/ These calculations are not just for explicitly defined systems either. If your a discretionary trader you just utilize your avarages for wins and losses over all your trades. Don't let yourself off the hook because the variables are always changing.
After problems with oanda and FXCM freezing and then missing limits, i opened an account with FXsol which is an awesome platform in my opinion.
I've got a $10,000 and it's set as $1 a pip (not sure how to change, but i wanted $2-5 a pip)
461 pips at $1.00 a pip so $461 since wednesday morning
Be Very Careful :
Closed trades at 1:30 pm Feb 2nd, 2074 pips on minilots.
Positive and negative trades.
Ummmm.... 400, I think thats close.
just had to post smthing here. I've also noticed ppl taking pride in positng how many pips they've made. If they're making money, I'm happy for them but as many are not concentrating on trading a single pair, pips can often be misleading. If I'd made 10 pips trading 1m cable and lost 9 pips trading 1m eurgbp, I've actually lost money. IF you're trading roughly equiv $ amounts in your base ccy for each trade then the number of pips you've made/lost might be more representative of your pnl but I would hardly say it's an accurate guage of performance.
The only thing that's important is your %net return (whether it's daily, weekly, monthly, yearly or since inception), and that is what you should be focussing on. Everything else in the real world is meaningless. You ever seen a fx fund posting monthly performance in pips? I think not
But your right a pip is worth nothing without money management
Money management, top of the MUST DO list.
With multiple lots and multiple pairs placed at strategic times and Prices, 8,400 pips!
The losses are smaller, the gains are large.
The trade were two days old or less. They are no closed. Some were scalps, some one day, and the rest two day. Some were positive and some were negative. The positive trades were very large. The negitive were very small. Although this is not a good indicator, 62.2% means that 55 positive trades out of 83.
My error. 66.2% not 62.2%
Just a correction. The % really doesn't mater.
I am heavy on all the Yens short.
7,143 Pips, 69.4%
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