How to Measure your Trading Success

PIPS or PERCENTAGE
Which of these parameters is most accurate, favourable and guiding as far as risk management is concerned to use in gauging your trading success…

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While you are learning, measure it in pips while keeping your position size minuscule so as to not blow your account. Once you are able to consistently rack up positive pips then you can look to measure it in terms of percentages.

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I track both on my own spreadsheet, but I mainly look at the percentage gain or loss every week

Pips are misleading inherently misleading: 10 pips on one pair is worth 20 pips on another. 20 pips on one pair this week might be worth 10 pips on the same pair next week.

I wonder if we should not all be trying to double our accounts each year. Considering there is a significant risk of loss of 100% of the trading account, anything less than a 100% gain would strategically be a poor return.

Doubling your account only requires a profit of 6% per month. So if you run trades with a 1% maximum risk and only a 1:2 risk:reward ratio, you don’t even need a positive win rate to do this.

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Depends on your goals…are you generating income?..are you generating wealth ?

At hedge-funds they have numbers they have to hit…you cant say i cleared 70 pips.

When I started like 10 years ago I wanted to make 200 pounds a month just to see if i could be profitable…only then I scaled

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I look for the profit/loss percentage.

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Money is the only meassurement

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I use total number of quality trades in a month, and i compare it over 6 months.

% gain in equity is the best measure, provided you are sticking to your trading plan. If you are risking a fixed % of you equity per trade, say 1% then number of pips gain or lost is not a true measure. For example for EURUSD if you use a 10 pip SL with a 20 pip TP and a lot size of 1, you will gain $200 if you hit TP and you had risked $100. For the next trade you use a 50 SL pip and and 100 pip TP on a 0.2 Lot, you are still risking $100 to get $200.

So if you win the first trade by hitting TP and lose the second by hitting SL, your gain in Equity will be $100 but your gain in Pips will be negative 30 pips for the 2 trades.

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I agree. Traders, especially when new and with very small accounts, got fixated on cash return and this is just going to be a distraction. Focus on % not $ or £.

(unfortunately, % seems to be a difficult mathematical element for US traders in particular: I don’t know why, maybe its something from US school education methods?)

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success its all about temporary session, always try to repeat success, otherwise its just valueless.

That’s makes sense… :+1:

lmao I think that’s what it is. I’m from the US, and I was scared to calculate percentages when I first started trading, but it’s really not hard at all

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