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:: Pips are not what counts ::

  • #81
  • Oct 29, 2009 6:39am Oct 29, 2009 6:39am
Pips are only a measure to the trading fraternity so really it doesnt matter outside of this realm. They are there as a basis to measure the success of a trade from the point of entry to exit, thats it.

Account growth is all that matters. If your account grows by x% means more than if you achieved x pips. It is also a comfort thing to minimise emotion. Traders look at pip accumulation instead of money in play, especially early in the career, to minimise there psychological involvment and so they can trade there plan.

I can understand both sides of the equation but there is far more to trading that just pips for and against

Razor
  • #82
  • Oct 29, 2009 6:40am Oct 29, 2009 6:40am
Quoting DubaiTrader
Of course statements are quoted in pips, but how you manage those pips is a whole new ball game.

You could of earned 1,500 pips in a month, and I earn +500 and I could easily be ahead of you in terms of $ growth. Factoid!
Maybe you should stop playing in excel and learn how to trade. Posts like these just clarify the reason 95% of traders fail. Yes of course how much you make depends on your lot sizes and risk but pips still count.
  • #83
  • Oct 29, 2009 6:44am Oct 29, 2009 6:44am
Quoting endroute
Maybe you should stop playing in excel and learn how to trade. Posts like these just clarify the reason 95% of traders fail. Yes of course how much you make depends on your lot sizes and risk but pips still count.
Maybe you need to remove the stick from your ass?

I'm learning how to trade, thanks and so far, so good!

You are completely missing the point about MM and pips. Quoting pips is a pointless exercise without further information. That is a fact, whether you choose to believe that or not is a different matter. Thankyou, and goodbye!
  • #84
  • Oct 29, 2009 6:56am Oct 29, 2009 6:56am
Quoting TraderHotch
In my experience the smaller IBs have a great % chance of working then larger ones actually. Size of stop is slightly irrelevant here as it's not a random entry.

As for assumptions, I'm not assuming anything, I've said it's possible to make money and lose pips, you've agreed, I'm not disagreeing that most people make profit AND positive pips.

As said, if you're making money, you're making money, so it seemed obvious to me that the discussion was more of a purist argument then a practical one, maybe I was wrong.

Maybe I'll do a journal and...
Smaller IBs can be great from a R:R point of view which only works if you hold them. Although you have said that size of Stop Loss is irrelevant nothing could be further from the truth. The smaller the stop loss the more likely it will be hit by market fluctuations. The trouble is the approach to smaller IBs. Most traders think small IBs are a great chance to boost there accounts and while they do, most go about it in the wrong manner. It is off the topic but I will elaborate slightly and if someone wants to carry it further im sure these forums can handle another thread.

By chasing 20 pips SL IBs with the same risk % you run the risk of being topped and tailed and loosing your shirt if you placed it on the table. One of the best ways I have found to tackle smaller IBs is to wager less than you would for a larger one, because you dont have the comfort of a significant border. By risking less you can approach them in a different manner and if you are with the greater trend then there are options down the track.

Razor
  • #85
  • Oct 29, 2009 7:49am Oct 29, 2009 7:49am
  •  Shan
  • | Joined Jan 2009 | Status: Work To Live, NOT Live To Work | 19 Posts
PIPS are all that count!!

Although it is possible with varying position sizes to lose pips for the day and still be in profit, what position size do you put on which trade? Not possible to know! It's only at the end of the day can you see that this has happened.
Think about it.
  • #86
  • Oct 29, 2009 7:54am Oct 29, 2009 7:54am
Quoting Shan
PIPS are all that count!!

Although it is possible with varying position sizes to lose pips for the day and still be in profit, what position size do you put on which trade? Not possible to know! It's only at the end of the day can you see that this has happened.
Think about it.
What?

If you have a variety of strategies ( i use 3) each can possibly have 3 different % risks attached to them. You then divide your risk by the SL to give you a % per pip. Each will be different. You should always know what size lots your going with before trading.
  • #87
  • Oct 29, 2009 9:30am Oct 29, 2009 9:30am
Quoting Razor_trader
One of the best ways I have found to tackle smaller IBs is to wager less than you would for a larger one, because you dont have the comfort of a significant border.
Words of gold. S&R on longer timeframes is visible from lower timeframes - it gets some respect (is more reliable). Therefore you can risk more. The opposite is true for lower timeframes (hence the smaller risk as Razor pointed out).
Going with the longer timeframe trend is important (you can prove this to yourself with some backtesting). This is game of odds. In order to increase your odds of finding a good IBs you NEED TO go with the flow.
Speaking about flow I recalled one very good post. Think about this and how it relates to the IB topic.

http://www.forexfactory.com/showpost...50&postcount=3

Bluefish
  • #88
  • Oct 29, 2009 11:13am Oct 29, 2009 11:13am
Quoting Razor_trader
Smaller IBs can be great from a R:R point of view which only works if you hold them. Although you have said that size of Stop Loss is irrelevant nothing could be further from the truth. The smaller the stop loss the more likely it will be hit by market fluctuations. The trouble is the approach to smaller IBs. Most traders think small IBs are a great chance to boost there accounts and while they do, most go about it in the wrong manner. It is off the topic but I will elaborate slightly and if someone wants to carry it further im sure these forums...
Ah, but if you have a smaller IB, then volatility is could be down. This is related to the pips argument, pips are all worth different amounts, 100 pips on USDZAR is a lot less impressive them 100 pips on EU. I'm not talking about different $ amounts, in terms of spread is probably a good way to look at it (and by extension in terms of risk).

I take you're point, again, it's theoretical vs practical view point.
  • #89
  • Oct 29, 2009 5:33pm Oct 29, 2009 5:33pm
  •  Shan
  • | Joined Jan 2009 | Status: Work To Live, NOT Live To Work | 19 Posts
Quoting DubaiTrader
What?

If you have a variety of strategies ( i use 3) each can possibly have 3 different % risks attached to them. You then divide your risk by the SL to give you a % per pip. Each will be different. You should always know what size lots your going with before trading.
I trade 1 strategy -VSA. Every time I enter its with the same rules, position size and probability.
Consistency in one system is the key and pips are what count.
  • #90
  • Oct 29, 2009 6:46pm Oct 29, 2009 6:46pm
Quoting TraderHotch
Ah, but if you have a smaller IB, then volatility is could be down. This is related to the pips argument, pips are all worth different amounts, 100 pips on USDZAR is a lot less impressive them 100 pips on EU. I'm not talking about different $ amounts, in terms of spread is probably a good way to look at it (and by extension in terms of risk).

I take you're point, again, it's theoretical vs practical view point.
I dont trade the fancy currencies, the fanciest I go is G/J but my model works on the increased volitility. Smaller candles/bar are usually the calm before the storm so in the case of contraction which is what an IB usually is you can have strong moves after. The logic behind the smaller risk is relative to the greater risk of playing with smaller bars. You dont need huge moves to gain great rewards over 20pip candle so you dont need to bet the bank either. If you do then great on you, you took a chance and it paid off. Larger candles have a smaller inherit risk (this is ofcourse depending on the overall scope of what, where and how your trading) so you could possible wager more and if the decision is wrong you can scale back as the market goes against you.

Once again the above is off the subject, but if you think as narrow minded as PIPs are all that counts then you have got a long way to go. I dont mark how many pips I gain or loss, it is an ego thing to shout out "i made 1200 pips this week". It means very little if you account is going in reverse or not growing in retrospect to the aforementioned gain, and yes it is possible to have big positive pips and still not go anywhere.

Razor
  • #91
  • Oct 30, 2009 1:43am Oct 30, 2009 1:43am
  •  Shan
  • | Joined Jan 2009 | Status: Work To Live, NOT Live To Work | 19 Posts
Once again the above is off the subject, but if you think as narrow minded as PIPs are all that counts then you have got a long way to go. I dont mark how many pips I gain or loss, it is an ego thing to shout out "i made 1200 pips this week". It means very little if you account is going in reverse or not growing in retrospect to the aforementioned gain, and yes it is possible to have big positive pips and still not go anywhere.

Razor[/quote]

Narrow Minded, Huh!
I like the attitude though. Atleast I know that when i'm in green pips for the month I've made money. Looking at your method you'd have no idea where your account stands. I don't know how you can stomach pulling green pips out the market and potentially making nothing from it, or even worse losing money.
IMHO if your stll reducing position sizes to account for larger stop loss requirements then you have a long way to go. Don't speculate, Read the market and be consistent in everything you do.
  • #92
  • Oct 30, 2009 2:11am Oct 30, 2009 2:11am
[/quote] Narrow Minded, Huh!
I like the attitude though. Atleast I know that when i'm in green pips for the month I've made money. Looking at your method you'd have no idea where your account stands. I don't know how you can stomach pulling green pips out the market and potentially making nothing from it, or even worse losing money.
IMHO if your stll reducing position sizes to account for larger stop loss requirements then you have a long way to go. Don't speculate, Read the market and be consistent in everything you do.[/quote]

I personally think you have a long way to go. Of course you should adjust position size if your stop is larger! Always risk the same %. A Trade carries a 50SL you divide your risk by the SL. Trade B uses same risk but higher SL, you simply cannot use the same position size, that is lunacy.
  • #93
  • Oct 30, 2009 6:12am Oct 30, 2009 6:12am
  •  Shan
  • | Joined Jan 2009 | Status: Work To Live, NOT Live To Work | 19 Posts
Narrow Minded, Huh!
I like the attitude though. Atleast I know that when i'm in green pips for the month I've made money. Looking at your method you'd have no idea where your account stands. I don't know how you can stomach pulling green pips out the market and potentially making nothing from it, or even worse losing money.
IMHO if your stll reducing position sizes to account for larger stop loss requirements then you have a long way to go. Don't speculate, Read the market and be consistent in everything you do.[/quote]

I personally think you have a long way to go. Of course you should adjust position size if your stop is larger! Always risk the same %. A Trade carries a 50SL you divide your risk by the SL. Trade B uses same risk but higher SL, you simply cannot use the same position size, that is lunacy.[/quote]

What's lunacy is widening your sl in the first place. Giving the market "room to move" is a joke, it says your not sure of your entry. Just reduce the timeframe and make a more accurate entry. I use a SET 10pip stop, with r/r of 1/3 minimum on EVERY trade. If i can't enter confidently on that i don't enter.
With MM CONSISTENT all that counts are pips, I aim for 50 a week and live very confortably thankyou.
  • #94
  • Oct 30, 2009 6:19am Oct 30, 2009 6:19am
I never mentioned widening your SL for the same trading strategy. I was referring to two different types of strategies that will obviously have different SLs.

This thread is going round in circles, I feel so I'll leave it here.

However, for the last time let me give an illustration as to why pips do not count when evaluating systems/strategies.

Assume the same risk for both. A is 50SL B is 100SL.

A makes 550 pips, B makes 1000 pips. Who is the winner?
  • #95
  • Oct 30, 2009 6:42am Oct 30, 2009 6:42am
  •  Shan
  • | Joined Jan 2009 | Status: Work To Live, NOT Live To Work | 19 Posts
Forget everything else for a moment.
If trader A) pulls 550pips out of the market every month and trader B) pulls 1000pips out each month, who would you prefer to be?
Obviousely pips are what counts.
  • #96
  • Oct 30, 2009 6:56am Oct 30, 2009 6:56am
Quoting Shan
Forget everything else for a moment.
If trader A) pulls 550pips out of the market every month and trader B) pulls 1000pips out each month, who would you prefer to be?
Obviousely pips are what counts.

You've just highlighted my point entirely. The person pulling in 550 pips with half the SL of B is the winner.

3% risk for both traders, trader A's pips are worth 0.06%. Trader B's pips are with 0.03%.

Trader A pulls in 550 pips or 33%. Trader B pulls in 1,000 pips or 30%.

I will say it one last time, the highest is not always the greatest!
  • #97
  • Oct 30, 2009 7:16am Oct 30, 2009 7:16am
  •  Shan
  • | Joined Jan 2009 | Status: Work To Live, NOT Live To Work | 19 Posts
And you missed my point entirely. I said forget everything else for a moment. Forget sl, different systems and % risk. Who would you prefer to be?
I know who I am. Enjoy!

Quoting DubaiTrader
You've just highlighted my point entirely. The person pulling in 550 pips with half the SL of B is the winner.

3% risk for both traders, trader A's pips are worth 0.06%. Trader B's pips are with 0.03%.

Trader A pulls in 550 pips or 33%. Trader B pulls in 1,000 pips or 30%.

I will say it one last time, the highest is not always the greatest!
  • #98
  • Oct 30, 2009 7:48am Oct 30, 2009 7:48am
The bottom line is that ANYONE can adjust their risk per trade to whatever amount they wish. They can do this from trade to trade if they wish. They can adjust how much they wish to risk per trader in pips as well. Neither of these require nor imply any trading skill at all.

Show me a trader who consistently makes 200 pips a month and another who makes 100 per month (hypothetical numbers). It doesn't matter what type of risk control or money management each is employing, the former trader is a better trader. He can always ramp up his risk to the same level as the latter trader and make more money.

So, yes, pips do count. If you can't make pips, then your money management and risk control mean nothing.
  • #99
  • Oct 30, 2009 7:56am Oct 30, 2009 7:56am
I haven't read the thread, but I agree with the title, in my house we live off pounds not pips. Negative pip systems can be profitable.
  • #100
  • Oct 30, 2009 8:12am Oct 30, 2009 8:12am
  •  onu
  • | Joined Feb 2006 | Status: superior senior member | 746 Posts
After reading this thread I got curious about the pip performance of my (demo) portfolio
http://www.myfxbook.com/members/pc8multifx

and guess what?

I would have to argue with myself, whether pips counts or not since the basics of all these EAs are almost identical(full adaptive-not exponential marty approach,hedges), but the result regards positive or negative pips are very different.

When i started trading, long time ago, it was all about hunting for pips.

Since i trade for a living its all about making money.

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