Pips vs. Percentages | Forex Factory

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Pips vs. Percentages

  • #1
  • First Post: Sep 4, 2016 11:36am Sep 4, 2016 11:36am
i have a question ..

somehow the world is quite crazy about "gaining pips" where the more are the better ..
yes yes i do understand al that .. but isn't the gained percentage alot more important as the range covered by doing so ?

yes of course .. the more pips you get // the better trader you are .. i do get that ..

but on a plain financial standpoint:
if one risk on every trade the same amount of the equidity a winning 10 pip trade will have almost the same reward than a winning 100 pip trade

or do i miss somethings there ?
  • #2
  • Sep 5, 2016 4:36pm Sep 5, 2016 4:36pm
You didn't miss anything. You are 100% correct, in it's all about percentages. Don't expect too much from any trading forum. Mostly gamblers here. Stick with your own instincts. Stay green...


Quoting nullx8
i have a question .. somehow the world is quite crazy about "gaining pips" where the more are the better .. yes yes i do understand al that .. but isn't the gained percentage alot more important as the range covered by doing so ? yes of course .. the more pips you get // the better trader you are .. i do get that .. but on a plain financial standpoint: if one risk on every trade the same amount of the equidity a winning 10 pip trade will have almost the same reward than a winning 100 pip trade or do i miss somethings there ?
SPC * Swollen PocketZ Crew!
  • #3
  • Sep 5, 2016 5:33pm Sep 5, 2016 5:33pm
Quoting nullx8
i have a question .. somehow the world is quite crazy about "gaining pips" where the more are the better .. yes yes i do understand al that .. but isn't the gained percentage alot more important as the range covered by doing so ? yes of course .. the more pips you get // the better trader you are .. i do get that .. but on a plain financial standpoint: if one risk on every trade the same amount of the equidity a winning 10 pip trade will have almost the same reward than a winning 100 pip trade or do i miss somethings there ?
Yeah you're right. Sometimes I read dudes here who say "won another 1000 pips"... who gives a rat's ass? What does it even matter if you risked 1000 for it and waited for weeks on end to have a measily 1R:R? Ok profit is good but one other factor that's important: time. That's an asset you keep losing and never gets replenished so don't bother getting one million pips, get one million percent gain (ok not realistic but you know what I mean).

Don't focus too much on these typical "truths" of trading though, (95% of traders fail, pips instead of money, stoploss/no stoploss, technical or fundamental, blablabla...) it will divert you towards a dead end. Try to look for good info and persue that. Much more valuable way to spend your time and earn a penny as well. There are some gold nuggets to be found, even on this forum.
  • #4
  • Sep 5, 2016 7:06pm Sep 5, 2016 7:06pm
Quoting nullx8
i have a question .. somehow the world is quite crazy about "gaining pips" where the more are the better .. yes yes i do understand al that .. but isn't the gained percentage alot more important as the range covered by doing so ? yes of course .. the more pips you get // the better trader you are .. i do get that .. but on a plain financial standpoint: if one risk on every trade the same amount of the equidity a winning 10 pip trade will have almost the same reward than a winning 100 pip trade or do i miss somethings there ?
I went to Harrods lately, I can assure you they neither take pips nor percentages. They actually demanded real money. The same is true for your local Aston Martin or Mercedes AMG dealer - it really is a strange world. Rumour has it that even Neapolitan tailors prefer cash over favours ...

Joke aside: I don't think the amount of pips will say anything about your quality as a trader. Many newbie traders however believe they need more pips because they're lacking equity. While that is actually a very flawed logic it probably explains why so many people are totally crazy for pips - and consequently are susceptible for follies like news trading, illiquid pairs and so on. Many people won't achieve a high percentage because they lack the skills to trade with great(er) precision.
  • #5
  • Sep 5, 2016 10:04pm Sep 5, 2016 10:04pm
Quoting ExForX
Yeah you're right. Sometimes I read dudes here who say "won another 1000 pips"... who gives a rat's ass? What does it even matter if you risked 1000 for it and waited for weeks on end to have a measily 1R:R? Ok profit is good but one other factor that's important: time.
thats exactly my point ..

if i risk on every trade the same amount in Percentages .. the only real "gain" i do get is the time as the reward is supposed to be the same anyway.

additionally .. a "beginner trader" like me without ivory spoons in the drawer.
can not even trade on a large timescale as the equidity not allows a swing trade with a 200pip stoploss (i think that is why most fail)

i had about 3k on my account yesterday, ripped 14% but i "traveled" only 122 Pips to do so (split over 2 pairs, so statistical its more like 60).

yeah yeah i know .. scalping in considered evil and whatnot .. but come on ..
in reality we all do just "scalp" a piece of the market .. makes no different what aproach we take.

just because my average trade time is 20 minutes and i make the broker a shitload of $$ in commissions makes me a second class trader ?
i really dont understand the idiology behind all that. sorry i get off-topic

time is the main component that is very true ..
in matters of risk .. i could not even afford to trade H4 anyway since my equidity is far too low to do so.
sure size blah blah .. but hey .. if i can make 80$ traveling 7pip .. why should i wait a week for a setup another week to execute a way of 200 to make the same 80$ ... that just makes no sense to me

okay while iam writing this i just made a quick trade again with my usual 1.5-2% risk .. 1:1,2 ratio ..
i got the 80 bucks .. and iam still writing here

but minus commissions and spread its just 59$ in the pocket .. that stresses the risk reward ratio dramatically.
so in that prospective i guess a longer spanning trade has some advantages.

but honestly i just not feel very confident exposing the money for too long time to the market.
that is sure mainly based on my lack of experience and trust in the markets.

also while the money is exposed i'm blocked to take other trades as i always risk everything in 1 trade (the full 2% (or less based on how the chart looks like))
and usually not move the stoploss.
  • #6
  • Sep 5, 2016 10:15pm Sep 5, 2016 10:15pm
Quoting JensG
Many newbie traders however believe they need more pips because they're lacking equity.
thats my train of thought too .. more pips require generally more risk (pips) and pips cost money specially if they are blood-red displayed

i use cTrader .. the order screen does provide me with exact percentage values .. so i can ajust the lot size according to my MM rules ..
so while trading .. i dont really care about all that ..

i see the setup .. check the SL range based on my plan .. type it .. and then ajust the lot size.
thats the "work" i do .. and the payment is simply if the take profit is hit.

but somehow i usually get responses to that like "you are not a trader .. just a scalper". blah blah and so on.
  • #7
  • Sep 5, 2016 10:25pm Sep 5, 2016 10:25pm
I read here somewhere that a trader's job is Three simple things:-

1) Enter trade based on your MM
2) Set SL and TP
3) Exit trade

That's how simple it is actually but it's very hard to do in reality.

1) Wash
2) Rinse
3) Repeat
  • #8
  • Sep 6, 2016 1:28am Sep 6, 2016 1:28am
I am currently in the green of about 250 pips since I started live trading but my return is 2.1% in the red.

Which do you prefer?
  • #9
  • Sep 6, 2016 6:15am Sep 6, 2016 6:15am
Quoting nozomi
I am currently in the green of about 250 pips since I started live trading but my return is 2.1% in the red. Which do you prefer?
i take the -2.7% ..

as 1 trade can boil that out .. and as stated above, the local Austin Martin store not accept pips
  • #10
  • May 8, 2017 4:55am May 8, 2017 4:55am
No, you are not missing anything! It’s all about percentage actually, but unfortunately I see many traders are trying to make here unrealistic profit, even they want more than 100% monthly percentage! Making 100 pips by 10 trade positions is not same to make 100 pips in a single trade position! By the way, yes I use same trading lot size in my live trading!
  • #11
  • May 8, 2017 11:32pm May 8, 2017 11:32pm
Pips are like coins. If I give you 10 and you give me 2 it says nothing about how much money was made or lost.
I could have given you 10 cents and you could have given me 50 cents meaning that I finish the day with negative 8 coins but make money.
Or... I could have been given 2 cents and given away a dollar in dimes. Pips gain or lost a day has nothing to do with whether a strategy is profitable.
You can gain pips and lose money. You can lose pips and gain money. Pips are a price change nothing more. It tells you nothing of the lot size of the trade. It's the combination of lot size and pips that gives you the true outcome of the trade. Pips with out lot size is meaningless. But a very good way to lure suckers into buying a system.
  • #12
  • May 16, 2017 1:48pm May 16, 2017 1:48pm
As long as the volume size remains constant counting pips is fine but if you are changing lot size on each trade then no. Some people risk % of their account on a trade while some prefer to keep volume constant until balance level crosses X amount.
  • #13
  • May 17, 2017 5:42am May 17, 2017 5:42am
Quoting SulemanMehmo
As long as the volume size remains constant counting pips is fine but if you are changing lot size on each trade then no. Some people risk % of their account on a trade while some prefer to keep volume constant until balance level crosses X amount.
Not sure what you mean about volume size.
i risk about 1% per trade, i don't really care the size while place the order.
i just make it large enough so it does meet the 1% rule of mine.

if my sl is 100 pips and on another order its just 10 the order will be 10 times bigger. Money-wise the risk is the same.

Iam not the partient guy so i trade mainly reversals on volume. So the stop is small as i go only for the initial
move.

so my statistics are usually negative on as 1 loosing swingtrade will "wipe out" all reversals.
But thats exactly my point

myfxbook say i made -12000 pips in 2016
but my balance ismore than double
  • #14
  • Edited 8:41am May 17, 2017 8:25am | Edited 8:41am
Pips are the unit of measurement for the distance between two values on the chart. Percentage is your P/L divided by your account. P/L is determined by your risk. You can enter 1 lot or 10 lots, but the pips gained are the same from entry to exit. We can take the same entry and exit, but with different lot sizes make different percentages. Not sure how percentage suddenly became the "go to" value. It means nothing to another trader. It only affects "you" by means of your account size. Who cares? Someone learning to trade will want to know the distance between entry and exit, which is pips, not how much money you made on it. If you are trading micro lots and I am trading 100 lots, will the distance increase for me because I have a bigger position than you? NO. The signal is the exact same.

That said, I understand the confusion. People who think percentages matter are looking at the money. People who think pips matter are looking at the trading signals. I personally prefer to concentrate on the process of trading. I can risk any money amount I want, but if I can't profit, well, that is a much bigger deal than my risk. I do not know what broker you are trading with, but mine won't give me profit unless I make pips.
You cannot be extraordinary by being normal
  • #15
  • Last Post: May 17, 2017 8:26am May 17, 2017 8:26am
Quoting DarrenLehma
No, you are not missing anything! Its all about percentage actually, but unfortunately I see many traders are trying to make here unrealistic profit, even they want more than 100% monthly percentage! Making 100 pips by 10 trade positions is not same to make 100 pips in a single trade position! By the way, yes I use same trading lot size in my live trading!
100 pips in 10 transactions = 100 pips in one transaction. Where do you go to school?
You cannot be extraordinary by being normal
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