:: Pips are not what counts :: | Page 3 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

TD Sequential counts Trading & analysis 172 replies

Would like advice and examples of bitwise code to store counts 4 replies

Pip Counts are Irrelevant 4 replies

Does stock counts in FOREX? 0 replies

Elliot Wave Counts in FOREX 1 reply

:: Pips are not what counts ::

  • #41
  • Apr 24, 2007 11:59am Apr 24, 2007 11:59am
Quoting Blackinc
I don't understand quite what you point you want to make by this? Sorry.
Then I can't help you there. I don't know how else to say this, except pips multiplied by lots. Not all of us can trade the same amount of total lots.

Quoting Blackinc
But as for me, a successful trader is a quiet achiever, knows what he wants, knows how to get it and does this year after year. In complete control all the time.
Least I can agree with you on this one. But I don't think the proper measure to compare one to others in the market is the total $ figure or total € figure one made in a year. No ones starting on equal footing. You can open an account with $20 all the way to $10,000 and they'll all make different returns with different amounts of pips.

What I like about pips in forex is that they're easier to count than %age. If I want to make 10% a week in stocks, I have to deal with math, odd lots of shares, odd gains, etc. In forex, I can just give a $ figure, and a pip will always be a pip. 10 pips, 40 pips etc. I can add more lots to make a pip worth more. I guess it's like the metric system. Can't do that in stocks. I can count my gains/losses here easily, and they're always uniform.
  • #42
  • Apr 24, 2007 3:07pm Apr 24, 2007 3:07pm
Ok folks, I think I will offer my two cents here.....In my spreadsheet and access database that I use to measure performance, I dont even have a column for pips, and if you search the whole file, pip is the word you wont even find. Here is why: Any strategy/System I use, I always have money management strategy in place. e.g. I have allocated $1000 for Team aphid's Bat strategy, I will only risk 2%($20) per trade untill I reach my initial target of $1200. every $200 in profit will mean $4 increase in risk per trade. Now, Lets take an example of three trades to demonstrate how pips as measurement of success or even one of the measurements is waste of time.

TRADE 1: lets say a trade comes along that has 100 pips stop loss, and my risk per trade is $20, so value per pip would have to be 20 cents a pip. Thats where i Love Oanda, where you dont have to trade in terms of lots, you can decide how much value do you want to trade per pip. in this example, it will be 20 cents a pip. and lets say my profit was 50 pips...which would equal to $10. Total profit - $10 Total pips - 50

TRADE 2: Now trade 2 comes along, in that my stop loss is only 20 pips, so value per pip would have to be $1 in order to meet my requirement of $20 risk per trade. and lets say i win 40 pips, wihch would mean $40 profit.

From these two trades, you can see how trade 2 only made 40 pips but $40 in profit, where as Trade 1 made 50 pips and $10 in profit. Total pips - 90, totoal profit - $50

Trade 3: This one requires a stop loss of 100 pips, and my risk is $20 again, so value per pip will be 20 cents. I lose this one. after this trade, My total profit = $30($50-20). Total pips - (-10). so you can see how pips made is nothing but garbage. it doesnt tell you anything. even though i am negative on number of pips made, my account value is positive. now, pips made/lost compared to pips risked(Reward to risk ratio) and number of winners(Accuracy)...those things are very valuable.
Contact me for Custom Indicators/EAs.
  • #43
  • Apr 24, 2007 3:11pm Apr 24, 2007 3:11pm
Quoting Warper
....
I just laugh another day when i saw here in the forum a guy grabbing about his 800 pips corresponding to 5 percent profit. What kind of dumb is him?
....
Is it just me or most of the the people around forget the other side of the trade - the stoploss?
Lets take GBPJPY, a true mover, 800 pips is the target and 160 pips is the stoploss. Achieving the target I can only see a very successful 1:5 trade and if the profit was 5% it means the trader risked only 1% of his equity. I wouldn't call him dumb, instead I would congratulate the trader!
-soso
  • #44
  • Apr 24, 2007 3:27pm Apr 24, 2007 3:27pm
Quoting zalakinc
Ok folks, I think I will offer my two cents here.....In my spreadsheet and access database that I use to measure performance, I dont even have a column for pips, and if you search the whole file, pip is the word you wont even find
Yet the rest of your post has pips 3 times a sentence in 3 paragraphs, and you're figuring out how much that money management is in dollar amounts and percentages by converting them from pips! Isn't that changing the term and definition to fit a philopshy or criteria? Because I see you using pips, and you see you using pips!
If i was to set a stop loss in a stock, I have to figure out percentages and shares, and place it in a dollar figure. In forex I do one thing. Lots times pips. That gives me dollars. Your broker has brainwashed you into thinking that there is "no lots", but your trading in lots. Just instead of doing an easy 0.01 lots, you're doing $1000. Once again, you're trading the same thing, but you're changing the formula and definition as if it's the Metric system. 0.1 lots would be $10k, and 1 lot would be $100k, aka standard lot. I can set the # of lots on my broker too.
I wonder if the opinions differ on people who have traded trade stocks, or come in forex blind. Because a pip doesn't look like a tick to me.

I do know what you were attempting to say originally. You want a good % ROI from account open to present day, but the central arguement...
  • #45
  • Apr 24, 2007 3:30pm Apr 24, 2007 3:30pm
Quoting Warper
Why Oh Why, dont you worry about the majority of opinions.
I just didn't think this would be so controversial. Really. It's interesting to see the different views. And most opinions are just so definitive. Some write "this is the way it is for me and that's it". Some give an explanation. Many don't. Others just take the original premise and disagree but bring nothing else to the table.

We've had it all here. And it's great to see so many people take the trouble to post their considered judgements. With a little or a lot. Many pips to everyone who wants them. And thanks for your post Warper.
Do not focus on making money; focus on protecting what you have.
  • #46
  • Apr 24, 2007 3:33pm Apr 24, 2007 3:33pm
Quoting Warper

Another guy said, "well you could win xxx pips but only have a 0.1% profit."

I say. Lets not exagerate. Ppl who make hundreds of pips a month and then have mediocre profit, dont deserve to get that many pips because they waste their precious gift of prediction, on a lake of fear that tells them that they will loose it all unless they invest something like 0.000000000000000001% margin. Thats sad.
.
Ok first of all, winning pips is garbage. we as traders need to think in terms of risk in terms of dollars per trade....some say dont risk more than 1-2% of your account per trade, some say 5%. whatever your prefernce is, but this is the best way i have found to control risk and grow account.

Here is what pisses me off: lets say you have $1000 in your account, and I call u and go like : Buddy...I found the best strategy, very low drawdown, 70% accuracy, 5 to 1 of reward to risk ratio. the only weakness is that your risk per trade is 500 pips. what will you do? most people who thin kin terms of pips will be like forget it....thats 500 dollars risk minimum on a mini lot. I would say bring it on....here is why. think in terms of value per pip instead of lots. but you have to trade in oanda or have huge account(notice i said OR NOT AND) to think like this. Lets say I was offered a strategy like this, I would be like ok....i shoudlnt risk more than 5% per trade, so risk $50 per trade. and 500 pips risk per trade. so that would be 10 cents value of a pip....and done!!!

Quoting Warper
I just laugh another day when i saw here in the forum a guy grabbing about his 800 pips corresponding to 5 percent profit. What kind of dumb is him?

With this kind of margin the guy needs to lose 16 000 pips to lose it all, omg... Sixteen THOUSAND and not winning nothing more. And that 16 000 would have to be in a single row... because once he gets out of the trade he might correct the lot positioning to fit the same margin again giving him another 16 000 thousand pips to spend in a single row. This its just too wierd or im really stupid to understand.
.
Ok, here is another misconception. 800 pips and 5% profit is ok...he is not dumb....may be he risks 5% per trade, and his stop loss was 800 pips. so in that case....its good he increased 5%. see the problem with many traders is they think in terms of pips,....THE FIRST THING WE NEED TO THINK ABOUT IS HOW TO SURVIVE AS A TRADER AND HOW TO CONTROL RISK. And the best way to do this is think in terms of dollars risked per trade...or account value risked per trade. if you risk 2% account value per trade, you will have to loose 50 trades in order to lose your whole account. which is very hard to do if you have a decent system.

Quoting Warper
The best player for the crowd is the one who wins 1 time but wins a lot, its the history of human kind .
Ok hereis where i disagree again. all good systems basically fall under one of two categories: type 1 - very high accuracy level, but so so reward to risk ratio. type 2 - mediocre accuracy level, and high reward to risk ratio. you can iwn in both systems. but its personality issue more than anything else. the one you are talking about is type 2 system. where you win once out of 20 times(accuracy very low) but when you win, you win big(REward is very high comapred to risk). I JUST WANT MAKE YOU AWARE THAT THERE IS ANOTHER WAY TO MAKE MONEY TOO...thats by having good accuracy like 70-80% and having like 1 or even 0.8 reward to risk ratio.
Contact me for Custom Indicators/EAs.
  • #47
  • Apr 24, 2007 3:34pm Apr 24, 2007 3:34pm
All in all it adds up to the same thing?
....Did you have more cash today then you did yesterday????
That is what REALLY matters.
Personally I trade with several different lot sizes, on different currencies.
The only thing I look at when I am done trading for the day is
+$$$ or -$$$.

my 2 cents.....
  • #48
  • Apr 24, 2007 3:46pm Apr 24, 2007 3:46pm
I'm sure you've seen the spreadsheets.

You put $10,000 in, use 10% margin, make 20 pips per day, and in less than a year you're over $1 million.

My goal is to average 20 pips a day.

When I can do that consistently, I'll up the ante. If I'm still consistent, I'll up it / grow it some more.

All I need is 20 pips per day.

Yes, I keep track of daily equity.

But to me, consistency is the goal, not the money. I personally have to trade with that mindset.

Now, and when I get to that $million$, there is, and will be no $$$ in the profit/loss column, only pips.

Also, the chart doesn't show your profit/loss, only pips.
  • #49
  • Apr 24, 2007 4:13pm Apr 24, 2007 4:13pm
I am on the same page as you:

My main goal this year (started first demo June'06, first live Aug'06, made a fresh start with $2000 in Jan'07) is to prove my system over an entire year and achieve consistency.
Here my goal is also about 20 pips/day or rather 100/week. If I achieve that I should make 400%+ on my investment.
But the point for me is that 100 weekly pips today = $80-100, where as once I have proven to myself that my system produces consistent pips, 100 pips can become $800-1000 and in time any multiple (I might even invest more funds in order to trade multiple standard lots based on the confidence that my system can make consistent pips.

But I agree with another poster who suggested that beginners tend to think more in pips and then evolve to look at risk, ROI, etc.
Consistency and patience is everything
  • #50
  • Apr 24, 2007 6:45pm Apr 24, 2007 6:45pm
Also stunned at the divergent opinions on this.

Price is measured in pips.

Does this mean that some of you are entering Trades with no inclination of how far it might go in your direction? ie. An initial target.

When I look at a chart and see the potential for a retracement or possibly a continuation my next thought is "To what Price?" If that range {between present and projection} is wide enough to make it attractive to me, I continue my investigation. Do it long enough and pips ARE $$.

Please note that my comments are directed only to ENTRY.

Pips OR $$ should not be the reason for exit. That should have been 99.9% decided on Chart analysis prior to Entry. If the potential drawdown is too much for you then you cannot afford the Trade.
  • #51
  • Edited 7:22pm Apr 24, 2007 7:01pm | Edited 7:22pm
i just feel like this thread took a different course.

Why oh Why had suggested that we use pips to measure who gets into the Traders Forum(dual membership).

He was saying someone with 1000 pips a year could be a trader and let in to post, and someone who is 500 pips could be a junior trader.

you can not measure success blindly on pips. I don't see how anyone can argue for that. If someone tells you with no other info they make 1000 pips a year, does that make them better then someone who tells you they make 500? NO. We need more information there.

Best,
Mike
  • #52
  • Apr 24, 2007 7:18pm Apr 24, 2007 7:18pm
ROI is what matters; end of discussion.
Keep it simple stoopid....
  • #53
  • Apr 24, 2007 7:35pm Apr 24, 2007 7:35pm
Quoting mbqb11
i just feel like this thread took a different course.

Why oh Why had suggested that we use pips to measure who gets into the Traders Forum(dual membership).

He was saying someone with 1000 pips a year could be a trader and let in to post, and someone who is 500 pips could be a junior trader.

you can not measure success blindly on pips. I don't see how anyone can argue for that. If someone tells you with no other info they make 1000 pips a year, does that make them better then someone who tells you they make 500? NO. We need more information there.

Best,
Mike
10000 pips x $0.01 per pip vs 100 pips x $1000 per pip
we know who made more money there.

I would agree with Kurka, its simply ROI not pippage.
  • #54
  • Apr 24, 2007 7:42pm Apr 24, 2007 7:42pm
Quoting BurgerKing
10000 pips x $0.01 per pip vs 100 pips x $1000 per pip
we know who made more money there.

I would agree with Kurka, its simply ROI not pippage.
ok so you are agreeing with me. Because you added extra information now.

Simply saying anyone who makes 1000 pips can be considered a trader just doesn't make sense. How you got to those pips is pretty damn important


Oh well just my opinions

enjoy the week all,
M
  • #55
  • Apr 29, 2007 8:43am Apr 29, 2007 8:43am
Quoting blueruby
You put $10,000 in, use 10% margin, make 20 pips per day, and in less than a year you're over $1 million.
I've read the whole thread, and I'm going to disagree with myself.

My statement above says "use 10% margin". In the real world, you can't keep this constant. You have to size the position based on your stop.

Your stop in pips, that is. (Had to get that in there)

To get to that million, you have to increase your account by a certain percentage over each time interval, regardless of how many pips it takes you to do it.
  • #56
  • Apr 29, 2007 9:00am Apr 29, 2007 9:00am
A question to make all things clear here:

Which one of these do you prefer:
- making 2000 pips average per year with +100% gain of capital, or
- making 1000 pips average per year with +200% gain of capital.

Your answer will determine whether pips or return is more important. Case closed.
Tra-X
  • #57
  • Apr 29, 2007 10:22am Apr 29, 2007 10:22am
A single simple measure or two does not a business model make.

ROI and pips aren't enough. Expectancy is not either (although is is far more important than most will ever realize). There are a combination of factors involved in running a profitable and sustainable enterprise of any kind.

"Make Pips" is a fine theme, something to be always aware of since these will need to be earned in some measure. But as a single most important measure? No way. There is just no such thing as a physical measure that drives a business - any business.

A note on expectancy - every single business with legs pays close attention to this principle. It comes in various flavors, but essentially, for every decision to invest capital, there is a "hurdle rate" it must meet in order for the spend to be considered a smart business move. Expectancy is NOT the domain of trading only.

Another interesting parallel. If you examine any business - successful or failed, you will notice one immutable fact - it is the *people* that make it go in the trajectory it takes. This runs counter to any MBA program on earth, but company culture, the psychology of the participants in the organism of the business will seal it's fate.

Check the Forbes 500 "Best Companies to Work for". Over time those that maintain a standing on the list win over and over again.

So, what about you the trader?

I picked up Tharp's Finacial Freedom book the other day and am in the middle of digesting it. While I am not really seeing what I would consider new business concepts, what *is* new to me is that fact that the baseline principles pertaining to successful companies (the 'culture' or collective psychology) applies in a new way to me in a very singular sense. Wow. Eye opening to say the very least!

Consider this too. McDonalds. Think they make dollars by selling more and more burgers? No chance. See how that cmpares to the "pips rule" mentality? Important - yes. Critical - not as much as one would think.

Concluding, your company culture (your personal psychology) is vastly more important than getting pips. Get this part correct and you will be a star. Get it wrong, or ignore it, and you'll look a lot like Eastman Kodak, or many other dead or soon to be dead companies.

It's a business.
I'm pretty much done with all this ...
  • #58
  • Apr 29, 2007 11:38am Apr 29, 2007 11:38am
Quoting StoragePro
Concluding, your company culture (your personal psychology) is vastly more important than getting pips. Get this part correct and you will be a star. Get it wrong, or ignore it, and you'll look a lot like Eastman Kodak, or many other dead or soon to be dead companies.

It's a business.
Actually, a better example would be Polaroid. Eastman Kodak decided to completely go away with consumer film a few years ago, and go with photo printers/printing kiosks for digital photos and get into making digital cameras. Sure, they still produce film, but it's specialty film, like for the movie industry, and for x-rays and other medical technologies... things that still haven't gone fully to digital technology.

Compare this to Polaroid, who refused to take any part in the digital camera revolution, and even tried to make hip new cameras a few years ago that use Polaroid film like the little sticky pictures. When they finally decided to take a part in digital camera revolution, they had already filed for bankruptcy.

So while EK had a setback a few years ago, they're slowly making a comeback... Polaroid, on the other hand, went completely out of business a year and a half ago.
  • #59
  • Apr 29, 2007 1:32pm Apr 29, 2007 1:32pm
Quoting BurgerKing
10000 pips x $0.01 per pip vs 100 pips x $1000 per pip
we know who made more money there.

I would agree with Kurka, its simply ROI not pippage.

they both made great trades.

trading is not a contest.
BAM BAM BOOM! -bravado
  • #60
  • Apr 29, 2007 1:43pm Apr 29, 2007 1:43pm
oh and by the way. for the purpose of posting on forums. i prefer the pips, not pips X lots or $ amount or whatever it is that you trade.

i don't want to see how much you made on your trade. if you made less then i have, fine. but if you happen to have made lot more then i have.. well that would just ruin my whole day. be courteous. don't ruin my already lousy trading day with how much money you made.
BAM BAM BOOM! -bravado
0 traders viewing now