What if you had a winning system that gave you 30-40 pips a week? And won 80%

What if you had a system that won, say 80%, but only netted you 40pips a week.

Would you be happy with that, and only trade that?
Or would you use another system to try and make more?

It would depend on how much each of those pips was worth.

See, in my mind stating to me how many pips a system makes per day/week/month is irrelevant (to me). I want to know what a loss will cost me.

If I’m running 2% account size at risk per trade, and stops are set at 5 pips, then 40 pips is a very good gain (a total of 16% account size). If however, my stops are set at 160 pips, then a 40 pips gain represents only 0.5% of my account size.

So, I don’t personally look at how many pips a system makes. Instead, I look only at risk reward - so for example, in a week I risk a total of 40% of my account on X amount of trades, but likely returns are 60% of my account size (a 20% account size increase).

I hope that makes sense, and sorry that I haven’t answered your question directly.

Where is the full story here? I don’t really care much about the 80%. I am more worried about that other 20%. How big are the losses? If it is 20% wrong then that leaves you with at least 8 losing weeks. Can this method handle 8 losing weeks in a row? How many pips you get in a week doesn’t really matter. What is more important is your risk to reward ratio. If you have low risk and high reward then you can use more of your margin on a trade and seek more rewards. All you really need are trades with at least 1:2 risk to reward ratio. If you have trades that are at least 1:2 then all your edge has to produce is a 50% win to loss ratio. Then if that edge produces 3-4 trades a week you are set!

Being a newbie, I don’t want to be perceived as a “know it all” as I obviously don’t, but, with moves on such a smooth pair as the EUR/USD of 280 pips on a Sunday night/Monday morning, sounds like your system “needs an overhaul”.

All my best, and, as always, good luck and good pippin.

Chubs

8 pips a day?!?

If that is the only method by which you are profitable then be happy with it and continue to learn and bump that up by 2 pips per week.

I believe that any novice using sound MM has the ability to pull at least a penny out of the market each week.

Being mechanical in your trading is like getting married and then buying your wife a dress the next morning for your 5 year anniversary.
You should monitor your wife (the market) for weight gain (change) and use the dress (method) most fitting for the current week.

Loss would be 1:1. Say t/p at 30, s/l at 30.

If you are willing to lose as much as you are hoping to gain, where’s the profitability??? I don’t understand your system at all.

You’re winning 80% of the time. So if you have s/l at 30, and t/p at 30. Out of 10 trades, you’d have roughly 240pips won and 60 loss.

The point I was trying to make is that I have now taken 4 trades on the EUR/USD since 1a.m. and am currently up over 350 pips including the short position I am in currently… 30 to 40 pips a week seems, though profitable, that you have a lot of room to raise the bar so to speak.

But, as I stand by my earlier words, I’ve never heard of anyone going broke by taking profit, so, if you’re happy with it, go with it.

With your hypothetical TP and SL of 30 pips and weekly average of 40 pips, that would be 1.33x your risk per week. With 80% success you could risk 5% of your account or more per week. That would be a gain of almost 7% on your account per week, which would have you ahead of pretty much every pro trader on earth. Enjoy your billions.

Anyone saying 40 pips “isn’t enough” or “you could set the bar higher” seems to have some strange ideas about trading and math.

That’s the point of this thread, just to see the different mindsets of the posters here, and what they would do, or think they would do. Personally, I’d be happy with it, but I don’t think I could resist making other trades. Of course I am not live yet, so if I was, and started to lose using another strategy, I"d probably force myself to trade the winning strategy.

I seem to be the only one who took your poll and stated exactly what you did at the end of your last post. Certainly I would take it, but I don’t think I could resist the urge to keep trading.

Good luck and good pippin.

Chubs

No offense, but if you had results like that and couldn’t resist the urge to keep trading, you would lose it all and end up with nothing. If you’re not trading with real money yet, you ought to work on that before you consider trading live.

I’ve had more replies from people like you since I started posting than I care to discuss. For those of you who, at best, have nothing good to say, KEEP YOUR OPINION TO YOURSELF PLEASE.

I am a newbie, TRUE.
I have several demo accounts and 2 live accounts. TRUE
I have only been trading for 6 months. TRUE
I have only been trading live for 2.5 months. TRUE
I have turned a $200 min account into over $2500 in the last month. TRUE
I don’t care about your negativity. TRUE

Don’t blame me if my level of success/failure doesn’t compare to yours. You are a synical, overbearing, overconformistic, individual that tries to put everyone into a box based on your rules and guidelines… I’m tired of being told that I am wrong about my abilities when my successes are far beyond my experience.

But, I live in a wonderful country that gives everyone the freedom to their opinion. Infact I’ve lived and worked in a warzone that defends that very right (and many others), so, thankyou… for sharing. Mom always said, sharing is caring.

Best of luck and, as always… nah… you deserve it.

Chubs

couldnt find an appropriate answer on the poll so excuse my not taking it, but in answer to your original question (thats why you started this, i believe), if i were 80% to the good, and the losses were balanced with the wins (other words, you didnt make 5 pips and lose 50) then what youre doing is just fine.

like significant others, it wont be the last “system” you enjoy in your lifetime and as you learn more and more, your abilities and concepts should increase dramatically, as should the amount made per pip also !

If its working well, you might just keep increasing your equity and go higher on the number of lots —

not much to worry about here, so - - - -

enjoy and trade well

mp

[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !! [/I][/B]

1 to 1 risk reward your profit comes from a win loss ratio of >50%.

A quarter is flipped and who ever wins gets paid a quarter.
if it was flipped 100 times and you win 51 out of 100 then you made
$12.75 and lost $12.25 for a net gain of $0.50

Get it? Got it? Good! :smiley:

[B]40 pips isn’t enough and you could jump over a higher bar[/B] :wink:

He’s got a point, I don’t understand how people come to say such things in a forum aimed to build up our confidence and strategies to improve every day.

Because it’s useful advice. It’s foolish to look at it as “discouraging”.

Overtrading because ONLY making 1.33x times your risk for the week is pure greed. Even at 5% risk per trade, which, while certainly aggressive, is not insanely so if you are very confident in your 80% win rate, that is around a 3000% ROI in one year. Have you ever heard of a pro trader making that kind of return without risking far more than 5% on trades?

And saying 40 pips isn’t “enough” just shows a lack of understanding. The number of pips is completely meaningless; all that matters is what those pips represent in terms of what you risked. If you risk 1000 pips per trade and end up with +1000 pips at the end of the week, you made less MONEY than if you risked 30 pips per trade and ended up +40 for the week, as in the example.

i guess when newbs are beginning, each trade must be weighed against RISK, sort of like a beginning tight rope walker and his/her first time without a net) but down the road youre gonna find that risk is something that kinda goes away and the more important thing is WHERE to place your tp point.

Now that dont happen in a day or even a few days – it takes some time for THAT confidence to build, and even with confidence, you still gotta KNOW where to put the danged profit point !

Now some people use a HUGE rabbits foot, a sharp dart, a blindfold and a “soft” chart set at about 12’ distance — with that kind of education i guess “risk” is certainly part of the whole equation, if not all of it !

and then there are people who “absorb” forex faster, easier and better than most others and just seem to do fine and in a relatively short period of time !

me, im just an average schnook whose been trading for a while and sorta had my mistakes forced up my nose so i could remember the “lesson” well, but hey — it works fine and i was blessed with the ability to talk OTHERS out of their money (mostly doctors and retired generals) so i can go forward rather conservatively like the turtle of song and fable - - - - - [B]slow and steady wins the race ![/B]

so lets see where im heading here — oh yeah . . . . . . . if its WORKING, then NO ONE can state that its wrong and if the “method” is being used conservatively and CONTINUES to be used conservatively, perhaps one should be asking HOW its being accomplished rather than IT CANT be accomplished !

I dont know, but until proven otherwise, i will accept what is being said because its far from being an impossible ROI, especially as returns are greatest at the beginning (has to do with odds and progressions and stuff i failed in high school !)

remember, there be a TOP 1% in the school and a bottom 1%, and maybe he got one huge rabbits foot also !

enjoy and trade well

mp

[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !! [/I][/B]