People seem to focus on the pip count so much, surely what matters at the end of the week, month and year is the % increase in your account?
well, for those newbie traders with the benefit of having $10,000 or more start up, I would think pipcount really shouldn’t matter much, as leverage is then king.
But for the other 85%+ of newbie traders, like myself not long ago, who are trying to learn something and make an account grow with a minimal deposit of say $500 or less, pipcount is what counts in accumulating leverage.
yes, I agree that % of account is king, now. 3 months ago I would have told you you were selling snake oil, but we grow as our accounts do. Until a newbie is making a consistent profit, Pips are King and Throne.
I only look for 25 pips a trade these days, or more depending on lotsize, but, I’ve been looking for 25 pip trades since I started. When I started, about 7 out of every 10 trades that went 25 pips went atleast 70 pips. Now that I actually know how to trade and understand the market, for the most part, my goals are much easier attained and I have “reigned in” my trading style.
So, leverage is king, in my opinion, and pipcount is a way to grow leverage.
Good pippin,
Chubs
Pipcount is completely meaningless.
Even % gain is meaningless; if you double your account in one month it doesn’t mean you have a great system, it could just mean you risked your whole account on one trade and got lucky.
All that matters is what you made as a percentage of what you RISKED.
All that really matters in learning, and profiting from your experience… Those who seem to think they know better, well, hmm, I’ve turned $450 into nearly 40k on a live account in the last 3 months without the assistance of an EA.
What matters is the bottom line. In order to increase your bottom line without risking your entire account is pips. We can dance around it all we like, but we are all in it to win it.
Good pippin,
Chubs
+1 to what chubspips said about learning and profiting from your experience
But from following the forums over the past few months I think the reason everyone talks about pip count is because that is the unit of measure that forex traders use. No matter the size of your account, the leverage you use, the lots you trade… everyone can relate to “I just made a 70 pip gain on the EUR/USD pair…”
PIPCOUNT is the universal measure of how a trader, system, EA or method is doing, as it gives a numerical value to wins or losses, similar to grades in school.
many can argue the relevance and i for one have never had a pip buy me a steak, but its a figure we can all relate to since percentage of increase or RO1`DIFFERS so much between small accounts starting up (when they have their GREATEST percentage returns) and HUGE accounts that make scads of money, but work on much lower percentages (because of the SCADS of money !)
its simply a rating system that everyone can understand easily, and therefore the reason its used !
enjoy and trade well
mp
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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 !![/B][/I]
For me, I never find pips that useful, for the simple reason that two people with the same size account can risk the same amount of money on a trade, one guy can win 10 pips and the other 100 pips, and it’s entirely possible that the 10 pip guy made more money.
Im not arguing here, simply pointing out commonly accepted practice. As i stated below, no pip ever bought me a steak, only money, but for comparison purposes, the trader with a million dollar account can make one or two pips a day and do VERY NICELY, while the trader with $5K may make 400 pips a day, and come no where near with money.
BUT pips are STILL the universal measure of interest in forex, just as points are what is discussed in stocks — its certainly liable to errors in the TRUE picture, but neither one (money or pips) is perfect.
for me, i want to know how much money i made at the eod, but if asked will describe it in pips so as to be easily understood for comparison purposes
mp
A measure that I use is percent increase per day…
and the most important component is a profitable trade… thus the focus has to be on money management and strategy.
Some days there do not appear the juicy trades to each person… and some days there are mistakes made… we have to preserve capital and refine our entries and exits to ensure that we are around tomorrow…
Sometimes counting money or pips or winners is self defeating… we have to keep in mind our entries and money management.
[B]
enjoy and trade well
mp[/B]