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How many pips does a "successful" trader collect weekly?

  • #21
  • Oct 25, 2007 5:27am Oct 25, 2007 5:27am
Quoting bluemonkey
I still don't get it.
He's just saying that the fact you're trading 1 round lot implies that you don't have enough resolution (mathematical, not mental) to size your trades properly.

Yes, there is an account size, and a risk percentage, that would result in a trade of 1.00 lot, using Merlin's formula (never say never).

But in general, if you're using proper money management, you'll end up trading 0.1, or 0.15, or 0.77 lots, or mini lots, or whatever...
  • #22
  • Oct 25, 2007 5:39am Oct 25, 2007 5:39am
Regarding the original question....

There really isn't an answer.

You have your method. You know how many dollars you need per week. You do the calculation.

Some people go for 5 - 10 pips per day, they have a high-probability system for a few pips, they use a large trade size, take their $500 - 1000 and shut down for the day. This person is happy with 40 pips a week. I certainly would be, at $100 a pip.

Others look for a trade that lasts for hours or days and nets 50, 100 or more pips. They'll probably use a wider stop, and will probably have a lower win/lose ratio than the person above. They will use a smaller lot size for the same % risk because of the wider stop. This person might make 300 pips per week. I'd be fine with that, too, at $10 per pip.
  • #23
  • Oct 25, 2007 5:47am Oct 25, 2007 5:47am
Quoting blueruby
Regarding the original question....

There really isn't an answer.

You have your method. You know how many dollars you need per week. You do the calculation.

Some people go for 5 - 10 pips per day, they have a high-probability system for a few pips, they use a large trade size, take their $500 - 1000 and shut down for the day. This person is happy with 40 pips a week. I certainly would be, at $100 a pip.

Others look for a trade that lasts for hours or days and nets 50, 100 or more pips. They'll probably use a wider stop, and will probably have a lower win/lose ratio than the person above. They will use a smaller lot size for the same % risk because of the wider stop. This person might make 300 pips per week. I'd be fine with that, too, at $10 per pip.
This probably the best answer I have read on any post. If you have the capitol, Less than 20 pips a day will help anyone eat and play good. If you don't have the capitol, the other method will get you get you there quickly if you have the proper discipline and technique (trading strategy)
  • #24
  • Oct 25, 2007 7:19am Oct 25, 2007 7:19am
  •  mld
  • | Joined Sep 2007 | Status: Pips Raining Cats & Dogs | 85 Posts
over +100 pips weekly but not very very (higher)
mld
  • #25
  • Oct 25, 2007 7:34am Oct 25, 2007 7:34am
Quoting DollaBill
This probably the best answer I have read on any post. If you have the capitol, Less than 20 pips a day will help anyone eat and play good. If you don't have the capitol, the other method will get you get you there quickly if you have the proper discipline and technique (trading strategy)
Thanks. I do try to make my posts accurate and helpful. Seems most information is only true to some people, some of the time.

You bring up a good point about the capitol. However, after the trials of the past few months, I have to opine that it's more a matter of trader personality than the size of the account.

In other words, the traders in my examples could have the same size account. Trader A takes bigger trades, tighter stop, lower t/p. Trader B takes smaller trades, wider stop, larger t/p. At the end of the week, they've risked the same amount per trade, made the same overall profit. The difference then would only be that trader A had a better win/loss ratio, and took more trades. Lemme see if what I'm saying makes sense.

Trader A
account size = $20,000
risk 2%
s/l 20
($20,000 x .02) / (20 x $1) = 20 mini lots = $20 / pip
5 t/p
20 trades
90% wins
lost 2 trades for 40 pips = $800
won 18 trades for 90 pips = $1800
net $1000


Trader B
account size = 20,000
risk 2%
s/l = 100
($20,000 x .02) / (100 x $1) = 4 mini lots
trades 4 mini lots, $4 per pip
100 t/p, 100 s/l
10 trades
60% wins
lost 4 trades for 1600,
won 6 trades for 2400
net $800

OK, came in pretty close for a first swag.
  • #26
  • Oct 25, 2007 3:55pm Oct 25, 2007 3:55pm
I think that when somebody says "My strategy makes 100 pips a week" he or she should say "My strategy makes 100 pips @ SL10 per week" as the pips alone are an useless concept, as it doesn't tell the risk per trade, which determines the value of the pip.

As to Merlin's 1lot: when you trade 1 lot (100.000) most probably you are not risking exactly 2% at each trade. You should trade something like 244, 23769 or 2675796 lots.

BTW, practice how to use Excel, as you will need it before every trade
  • #27
  • Oct 25, 2007 4:11pm Oct 25, 2007 4:11pm
I never keep track of pips. They don't pay the bills.

The only thing that matters to me is my P/L at the end of the day. As long as it's black, I'm heading in the right direction.

In fact, I've had days where my pip total was a negative number yet I still made money.

MM is the key.
  • #28
  • Oct 25, 2007 9:28pm Oct 25, 2007 9:28pm
A successful trader KNOWS he's successful. An unsuccessful trader THINKS he's successful.

~X~
  • #29
  • Oct 25, 2007 10:20pm Oct 25, 2007 10:20pm
Quoting bugscoe
I never keep track of pips. They don't pay the bills.

The only thing that matters to me is my P/L at the end of the day. As long as it's black, I'm heading in the right direction.

In fact, I've had days where my pip total was a negative number yet I still made money.

MM is the key.
Very true, and i've had the opposite. Weeks of 300+ pips, P/L in the negative.

That was prior to solid and diciplined MM.
To be one with the market, you must first be one with yourself.
  • #30
  • Oct 25, 2007 11:21pm Oct 25, 2007 11:21pm
I would not exactly say that pips are irrelevant as that is a bit of an overstatement, but really in terms of profitability pips are a poor measure of overall profitbability. A trader who is setting different size stop losses and adjusting lot size to account for percentage risk per trade could lose 15 pips on 5 trades in a row and win 300 pips on 1 trade. Assuming for purposes of simplicity the trader was trading at a 1:1 profit/loss ratio and risking 2% on each trade, the trader is "up 225 pips" but their account is worth only 92% of what it was worth originally. For the guys just starting out in trading- This scenario is the reality of trading in forex, risk should be consistent but often times profit targets and stop losses must vary widely and flexibly to gain an edge, therefore the only variable left to change is the number of lots being traded.
-- Catch the market with it's pants down - Trim away the fat --
  • #31
  • Oct 26, 2007 12:03am Oct 26, 2007 12:03am
Quoting M.A.C.Doug
chasing big pip targets actually increases you odds of losing, completely unnecesarily
I will have to disagree with that... Long-term traders generally have a higher trade success rate despite chasing bigger targets simply because they use longer term charts which are (arguably) less noisy and also, to some degree, because of lower transaction costs as compared to a scalper. I do agree with the rest of your post though.

The way I see it is like this:

1. The reason Merlin mentioned never to trade 1.0 lots is because if you want to trade that, you should have a lower account where you can instead trade 10.0 lots that amount to the same thing, to improve resolution. Apparently Merlin has never heard of MT4 brokers who offer partial lots as small as 0.01 . Just kidding. In any case, his point is that lot size flexibility is very important (or as he calls it "resolution"), and if you are forced to trade inflexible round number lot sizes you cannot optimize your money management techniques.

2. Pips are NOT irrelevant, but at the same time they do NOT tell the whole story and are pretty USELESS in determining the overall success of a trader if that is the ONLY information given. It's like telling someone that you make an average of 100 Zambarian Dollars every week from trading. Does that mean you're successful? Well, you don't know, because you have no idea how much a Zambarian Dollar is worth in the real world. That's not to mention the many traders who do not use consistent money management, and as several posters before mentioned, could even have a positive pip count while still losing money. SO, pips are NOT a good way to measure success. IMO, the most reliable way to measure success in trading is to calculate an expectancy value of your trading system and multiply it by the number of trades taken within the desired period (in this case weekly, although I would generally give it a longer period for more reliable results).
  • #32
  • Oct 26, 2007 12:23am Oct 26, 2007 12:23am
  •  shauny
  • | Joined Jul 2007 | Status: Still learning and never gonna stop | 127 Posts
I would like to see a accurate way to determine the calculation of probability through a series of proper calculation to determine the success of the system and trader. I know by looking at amount of pips made can sometimes be confusing, it can be positive pips but negative P/L. Those who are more experienced, probably can shed some light on getting the profitability right without inflating wins/losses. Anyone?
  • #33
  • Oct 26, 2007 12:27am Oct 26, 2007 12:27am
Quoting erikcw
I believe what Merlin is saying is that total portfolio gain is tied more to the nember of lots traded rather than the number of pips scored. 10pips X 10 lots = 100 pips X 1 lot (only trade as many lots as you can afford - RISK MANAGEMENT!!)
You are completely right. I'm familiar with professional traders who make about 10 pips a day. And it really doesn't matter, because these 10 pips, while translated to money, equal a decent percent of their account.
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  • #34
  • Oct 26, 2007 12:28am Oct 26, 2007 12:28am
Quoting shauny
I would like to see a accurate way to determine the calculation of probability through a series of proper calculation to determine the success of the system and trader. I know by looking at amount of pips made can sometimes be confusing, it can be positive pips but negative P/L. Those who are more experienced, probably can shed some light on getting the profitability right without inflating wins/losses. Anyone?
expectancy
  • #35
  • Oct 26, 2007 1:53am Oct 26, 2007 1:53am
To add something to all the things that have been said about pips:
- counting in pips is useless also because the value of the pip is different depending on the pair: let's say you trade 1 lot (sorry Merlin, it just for a simple example ) EURGBP and 1 lot USDJPY. you make +150 pips on USDJPY and -100 on EURGBP. result +50 pips but negative P/L.

And when you go t osee your banker for an investment, what do you ask? What is the return in % or how many pips per year (the ones who choose the second choice are too much addicted to Forex )

Personaly my objective is 4% per month.
  • #36
  • Oct 29, 2007 12:51am Oct 29, 2007 12:51am
Quoting M.A.C.Doug
Let me spell it out, if you are risking a mere 1% per trade and your risk reward on the trade is only a conservative 1:1 so that your return if the trade wins is also a paltry 1% then one winning trade per week. compounded, will give you a 100% per annum return. The target could be a modest and easily achievable 20 or 30 pips only. It has absolutely nothing to do with the number of pips and chasing big pip targets actually increases you odds of losing, completely unnecesarily
I am somewhat mathematically challenged, so I have to ask, How does 1% return per week (compounded) translate in to 100% per year? I always thought it would translate in to about 66% a year. I'd be interested to learn how this is done.

Thanks
  • #37
  • Oct 29, 2007 6:05am Oct 29, 2007 6:05am
Quoting Norman1
I am somewhat mathematically challenged, so I have to ask, How does 1% return per week (compounded) translate in to 100% per year? I always thought it would translate in to about 66% a year. I'd be interested to learn how this is done.

Thanks
My apologies, you are correct. 1% return/week compounded weekly for a year is 67.75%. I will endevour to be more precise with my figures in future. However even 67% is better than the best performing hedge fund last year so my point is still valid
BTC Return This Year: na
  • #38
  • Oct 29, 2007 6:34am Oct 29, 2007 6:34am
no need to apologise...I just thought I was missing some special secret of trading, especially seeing that Merlin had made the same point earlier in the thread...You had me excited for a minute there!!
  • #39
  • Jul 2, 2011 10:32am Jul 2, 2011 10:32am
I think that for nice living you can start with 10 000$ income a week ... you can make these money with only with 10 pips a week and with 100 lot positions. Think, 10 pips a week is not impossible to make
  • #40
  • Jul 2, 2011 10:53am Jul 2, 2011 10:53am
Quoting merlin

first of all, if you have a system that wins every week, i dont care how much it makes, its a winner. if it makes even 0.5% per week you will be rich in no time. if you dont believe me just do the math. as Einstein said, compound intrest is the 8th wonder of the world.
Wisdom.
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