There are many traders on BP who I believe are making consistant profits whilst holding down a day job. There are fewer who trade professionally i.e. as their sole source of income. There are also two I know of who are interbank traders. How much each makes we can speculate on ad infinitum. The part time traders are obviously making ‘enough’ or I would imagine they would not bother. The professional retail traders must be making at least what they made in their previous day job. The interbank traders if worth their salt will be making anywhere from $150K and up.
Newbie, I would like to ask a question, and please do not construe this as an insult, are you a native English speaker, in other words is English your primary language? The reason I ask is that sometimes a non native English speaker will read an illustration like Bucks, spoons, forks, and fingers and find it insulting. To me, American, Second Generation German, its just a straight foreword illustration. As an aside I speak 3 languages fluently, and 2 more kinda sorta.
In any case you need to grow a thicker skin if you are going to post on boards such as these, BPips is THE most Genteel trading board I have found, so in reality, I think you are being waaay two oversensitive.
Back to the post at hand, I must disagree with you assessment of Pips only. The beginning of a true test of a successful trading “system”, would be, ROI, Sortino, and Sharpe. There are others, which include taxability, compounding etc. But a good base starts with the above three. If you are looking at your own account, you can measure it anyway you want, but if you really want a cold hard look at what you are doing compared to others, then you really need to “drill down” for a better look.
The Ever Seeking Alpha VIPER
The reason that Buckscoder has made these comments is simple. He wants to insult me…Period !!!
You asked if English is my primary language…I think in the English even in my sleep…!!
Now as to your question of Pips …I have consulted three people who are professionals and their response is simple.
Yes…everything is important…however the first thing that you should decide is what is your position size and all that depends on your account size…so once you decide are you taking 10K , 20K, 50K, 200K trades then you do not need to compute this on a daily basis…
Next thing that you have to do is simple…make pips and continuously make pips…
You have to evaluate on a daily basis and a weekly basis…how many pips you have made…
where are your mistakes and where are your strengths… In case your account size increases yes you can increase your position size.
But when you start new…go ahead an play with as small a position size as possible…
you could start with a micro or a nano account…
Play very small …it is not important in dollar terms what you make…
Only important thing is the PIP
Repeat
PIP
Because if you consistently make pips with a formal written plan which you execute without deviating from the plan…
You have a good method…and then only can you increase your position size of course with proper money management and hence you can increase your dollar profit.
I started with 1K lots (I used to win or lose 50 cents or a dollar daily) and now I am trading with 20K lot size
last week I made 300 dollars and 150 pips…
I only trade interactively …no trades when I am sleeping or not at the computer.
I trade from midnight to 2 am PST USA
I do not care if anyone tells me something else…
I repeat…3 experienced super traders have told me the same things I mentioned above…
Money management to decide position size
and then repeat the mantra 10 times a day…
PIP…PIP…PIP
Method…Method…Method
LOL!!! Were getting bogged down here Gents! Does it really matter which way you calculate it? Personally, I use both… pip count and percentage win/loss. Those who know my methods will know I trade very small lot sizing… 0.1% of balance lots as a percentage of my account. I look for around 5% a week return re account balance. As I trade the longer TF’s that equates to 500 pips a week but only 5% growth. So in fact I would argue that knowing one without the other is meaningless. I mean someone could be trading a huge lot size for 5 pips and make 5% or in my case 500 pips for 5%. :18:
Be careful with such wrong statements! Why should I? I have nothing against you (I do not even know you in person) and I did not write anything other than my opinion based on some facts and all centered around the discussion and your statements here and not any person. I even have no idea where you come from what you look like, etc. It would be really nice if you would explain why you feel insulted if I try something to illustrate to help you understand what I mean.
Exactly…here you are …if you make 500 pips a week and someone makes 50 pips a week trading at 10 times your position size…because his account is 10 times larger…
First thing is the other person being compared …I hope he uses proper money management…
There is a stupid theory I read where the crazy lunatic recommends playing very high stakes…
with a 10,000 dollar account he recommends that you trade 8000 margin …can you believe this…
so if FXCM says we need 320 dollars for a 10K trade as a margin …that would work out to 250 K lot size with a 10,000 dollar account…
Get rich quick huh !!!
Most stupid thing I have ever heard
Coming back to your posting…Mr. R Carter
why should you compare yourself in dollar terms to another trader or even percentage terms to another trader.
I am new and hence …Yes…I can lay my hands on 20K but I want to start small…so that even if I lose I lose small.
hence the barometer for me is the PIP !!!
Buckscoder
I do not need to defend myself and re-gurgitate everything.
Go read your posts and check what you have written.
You can dis-agree technically on anything that I have written but you have totally crossed the line between disagreeing and insults
Regularly you have as you say “tried to push my buttons”
I take great offence to people like you who are basically "Having Fun"
I shall never never answer your postings…
I write this response to you as my last response…
You shouldn’t… but its a common enough question asked here. I guess people want to know what is an ‘average’ or ‘realistic’ figure? Pips or percentage or both? Whatever floats your boat my friend. 
My fun came from your postings, not from you. There is a gentle difference. We make all some fun here and there an I write often something funny and I wouldn’t feel insulted if somebody says he feels funny if he reads it. We are not at a funeral here, lol. I guess? As I said, I don’t know you in person and have nothing against you. Regarding that illustration you missed the answer.
However, happy pipping to you! 
One of the brightest information what I have read since I am at bp. Definitely!
RC, sigh, what account size has your “institutional trader”? Because just a singular $ housenumber is as worthless as the info: “I know somebody who knows somebody, who knows somebody, who makes a lot of money …” Well, I assume you are kidding, lol.
Letz say somebody has 1k in his account and makes 50% roi. Letz compare that with somebody who has 1m in an account and makes 100k. Who has better success rates? The guy with the “just” 500 profit or the one with 100k of profit? The first one. Because the guy with the big pockets makes “just” 10% roi. Which is 1/5 of the champion in relation to the champion in this case. And even that is just a small info what we can get. We don’t know anything about the drawdown of both of them, sharpe ratio (no, has nothing to do with how sharp your pocket knives are, lol) and so on …
Buy one SortinoWOW now and get ten more for just shipping and handling :30:
Well, not really, but there is more. An Indy trader in the USA has to be sharper than any trader at any Big House or Prop Firm. Why? Because our income comes solely from trading, who pays our health insurance, rent, T1 or FIOS, SS contribution, who pays for the tax consultant, who pays for our server upgrades, security upgrades, legal fees etc etc etc.
We must understand that there are a whole host of costs that the Indy trader pays that a Prop trader never sees. Most prop traders are a small cog in a larger machine, they do not have to worry about how the overall fund is put together and how it relates to other funds of the same class. So what do protraders focus on, pips and points, because that is their job. The Indy trader does not have THAT luxury, for the Indy trader, trading takes on even more urgency than ANY Prop trader. For example, if a prop trader blows up after 5 years, usually they can get another job either within the house, (sales, back office, etc) or possibly another house. But if you are an engineer and blow up after 5 yrs, you are 5 years removed from the job market and 5 years older, you have blown out and now need to find a job, “have fun with that Bud or Budette”.
Here is another reason we use the standard bench marks. If we are netting 150K per year on a 1Mio account, why bother? We might as well put our money in a reliable fund and do something else with our lives. Please understand, it is necessary to use other bench marks. We need to compare the risk of our capital to general risk in the market, if we don’t, then we really have no idea where we are and where we are going and how do we get there. Basically, Smart Money does not risk more than 3% of the account per trade, this could be controlled by leverage or stops, but this is the reality. Over 100K Gross a year is possible, but what would be the net, how much are you risking to get there, and is it sustainable.
I am not posting this to anyone in specific, all those who are thinking about a career change to please look at what the most successful Hedges are doing, don’t take my word or the word of anyone else, take the time to do the research, read the ICT thread here, and also read the Psychology Blog, save yourself some suffering, know what you are truly getting into BEFORE you leap.
The Ever Trying To Help VIPER
That’s a bargain! Ok, how much is p&p? 
I need it for as you well described and I need those numbers al well to compare different strats. Why would I use a strat with a higher dd, worse sharpe ratio and lower profit ratio if I can use the better one? That’s all measured in something like percentages rather than pips to have something as basement what I can compare then with each other strat.
Then as you elaborated, everything with an roi less than 25% while trading is to me something worse than just buy some commodities and let it run. Why would somebody invest more work for the same roi what he can get while just sitting on what he bought for years?
Newbie, you are not making any sense. Do you mean to tell us you don’t know what your account size is?
Percentage of gains, Newbie, is the only true barometer of your progress. It might be fun to count pips, but pips, laong cna be misguiding. There was a time when I took great pride in counting pips. I had a business, and followers of my signals were blown away by the quantity of pips I got on a consistent basis. Making 3,000 pips per month was nothing. The problem was I was managing 7-10 trades at one time and going out of my mind while everyone else was impressed. My ego got stroked while I was loosing my mind. I now manage 1-2 trades at one time, and my ROI is about the same. This is because I have approximately 5 times the position size as I did running the 7-10 trades.
Let me give you another example of how unimportant pips are. What I’m about to say I have the proof right here on this computer I’m typing from, so don’t doubt me. I was in a forum and got challenged (I admit I get myself in a lot of situations others wouldn’t because I have a big mouth, but I back it up.). This one trader was telling me how impossible it was to trade with the ichimoku cloud nad make any pips using it. We went back and forth. After awhile, I had it. I posted in my thread 17 trades that I put up at one time. All 17 trades were winners and I made 3,650 pips in two days. The drawback was I had 1/50th the margin I usually had just so I could shut someone up. Those 3,650 pips equated to actual gains of the equivalent of 73 pips. Another drawback was I thought I was going to get corporal tunnel from closing the trades.
So, if you want call me stupit, or I’m just blowing my horn, or you can also say I’m picking on you. I’ve given you proof I can document to show why pips are of no importance. Others I have tried to get you to see that the ROI is the only true gauge of how you are progressing. You could make those 3,650 pips, but if your ROI barely scratched the service, like mine did, what good did the pips do. Also in gaining more pips you will have to sacrifice position size. I get a puny 600 pips per motnh now, as oposed to the 3,000 I used to get, but I am a better trader now than I was then.
Another thing (Funny I thought I was finished–lol.). If you start making pip goals, you will start pressuring yourself to get in more trades than you should. You will also stay in trades longer than you should just to get the pips.
Having said all that, if you are on the winning foot, and your equity is higher now than when you started, that is still the bottom line.
That’s where you drop the ball. I made 9.5% on Thursday to Friday alone. I don’t do that all the time. It’s even an exception to the rule, but like Purplepatch said, “I wouldn’t trade forex if the most I could make was 5% a month.”
Kind of a bummer. I got in here a little late.
In summary to some of the conversations that went on the answer is “yes”, lots of money can be made in trading. If that sounds vague, it has to. No one is going to get on here, except only one guy in this forum that I know of, would post their earnings statement. Everything when it comes to any kind of specificity would be spoken with in vague terms. The only conceptual idea you can have of how well someone is doing in their trading is by their reputation.
The reason most people come to this forum is to learn to trade. There are few seasoned and successful traders in here. Again, we have more vagueness. How can you tell? Follow the posts and the reputation that goes with it. After that, you might get a conceptual idea of who is making the money.
I know there was some conversation about knowing this person that made all this money and etc. I could tell you about a few people that I know firsthand that are making money. Either you all get a laugh or it will put you to sleep. Does anyone really care that I had a nephew who is the father of a worker of the manager at Mac Donald’s, who was a student at Miniland Jr. College (I made that up.)?
Now, if I did not know how to trade, I’d be saying, "Please! treat me like a horse, and lead me to the water.
I rambled. Just wanted to get my 2 cents in.
I love how people who most probably don’t have much, if any experience under their belt, suggest that any traders making more than 5% a month is not possible. This is complete and utter rubbish, and a personal opinion based on no hard facts.
Ok, I left that last post a little short and sour, so here are some hard facts with respect to earning $100,000 in one year. Can it be done, yes it can, and can it be done from a bank roll of $1,000 yes it can. In fact it can be done in less than 12 months, nearer to 32 weeks.
I have a Trading Algorithm which I have been designing for nearly two years. Since January 2008 to this very month the ROI each month has been between 60% and 100%. In fact, I usually hit 100% in the first three weeks of trading. Built into the algorithm is a program to stop trading in the current month providing 100% ROI has been achieved.
I have used this same algorithm in the Alpari UK ‘Top Trader Contest’, so you can check out that I’m not full of bull. I have gained +358.50% in the first twenty days of trading, and so far sat at 32nd place from 8,500 traders around the UK. I by no means want to show off, and nor am I going to share this trading system, however, I just wanted to answer the original thread with an example that can be checked by each and every interested party.
Just a question from a more theoretical perspective than a ‘money’ perspective ~ last year I was fascinated with ‘back testing’ and thought engineering skills would be an advantage w/respect to trading. As it turned out… strictly speaking they were not. What I kept coming up with were strategies that were suited to market conditions, and when those conditions changed the algorithms ran into trouble (demo trading only, but the point remains).
So the question is, how does one know if the algorithm is going to be any good in say, 1 or 2 year’s time? It’s a conundrum. I gave up on algorithms entirely, not because they can’t inherently work, but because I couldn’t personally answer the question.
Incidentally, I do agree with the larger point ~ it is entirely possible to build up from very little in almost any business (excluding aircraft manufacture, perhaps!). Without getting into details I’ve built two other small businesses up from… the first was from about 6000 USD roughly (2001), and the second, literally 72 dollars (2005). The second one enabled me to buy a new car with cash just after the stock market crash of 2008… horrible timing, I know! But new cars were cheap then and the former vehicle was making some truly awful noises. Between just those two businesses I am comfortable, though I still do engineering consulting from time to time. I fully intend to start with a very small amount of capital and stick with forex for years. I’m in no hurry. If it’s possible to succeed at forex at all, then it can be learned and accomplished.
I am certainly not wealthy but would say this: “get rich slow” is a highly viable strategy for anyone who has the guts to start and the guts to stick with it, in almost any field, even in the worst economy in many decades. If I had one regret, it’s not trying when younger.
Okay…Here is my simple method…I am a simpleton who loves to use the KISS formula.
a) First decide your method…Yes I have come to a decision regarding my method
b) next decide your position size…yes…I arrived at this by considering my account value which is $4000 and decided
I want to play at 20K positions
c) Do not have a goal of XX pips per day
d) never get into making more than one position at a time.
e) From this point on…only count pips…
This is my simple system…
I do not want to compare myself to anyone else…This is not a contest !!!
I want to evaluate on a spreadsheet on a daily/weekly/monthly basis…what is my PIPS
I shall increase my position size when I hit $6000 to 30K
so simple !!!
KISS
Yes I have a method…like others who have algorithms and are unwilling to share their secrets…Me TOO…I am unwilling to share my method…
Last 2 days I made a total of 90 pips or if you want it in dollars it is $180
Again I say
Method & PIPS
KISS
Hi Desmond,
Fundamentally I agree with what you are saying with respect to algorithms not always working over the long term, and that was an issue that I had at the forefront of my mind. The only aspect of the market that I could confidently confirm has been constant over time in any market is ‘Market Cycle’. In essence we always get a day high and a day low, always have, and always will. I hope we are in agreement at this point.
The answer then lies within this market cycle, trying to build an algorithm or system that is trading off these consistent market cycles. This is how I went about my trading theory, but unlike many others, perhaps with better computing skills than myself, have automated their system. I very much like the sound of this, however I have not yet been able to do this due to areas of programming that I am unsure of. Hopefully in the not to distant future I will be able to automate my algorithm, but if im honest, I enjoy the manual aspect of entering trades and also the manual aspect of back testing. Yes, this can be very boring at times, trying to stay awake when trawling through years of data. However, on the upshot I learned allot more about this market cycle phenomenon. This is a skill you do not gain through automated back testing.
Unfortunately, and worrying, time will tell. But thankfully like many other trading theory’s, you cant loose everything in a boom of smoke. You see a decrease in ROI over time, and then investigate as to why this has happened etc.