Your opinion please!

[U][B]Real pips vs. any pips[/B][/U]

Your thoughts and opinions on this issue.

Which do you prefer and why?

I am sorry, but what do you mean by saying “real pips” and “any pips”?

10 lots for 100 pips. Some say that this is 1000 pips. Some say this is 100 real pips. What do you think?

No opinions? Hmmm…

What you prefer will depend largely on your own personal trading style. If you are a position (long-term) trader going for 10 pips on 10 lots is utterly useless. In such a scenario stops are typically much larger, which makes the idea of going for only 10 pips a horrible risk:reward proposition. Don’t forget that the 10 lots you put on applies to the loss side as well so if your risk:reward is all whacky in terms of pips, you are screwed. :slight_smile:

If, on the other hand, you are a scalper then this is entirely different. Because stops are much much tighter for scalpers, going for 10 pips of profit on 10 lots may not be such a bad idea.

It really boils down to your risk:reward equation. If you have a 50 pip stop and you are going for 10 pips only then that simply should not be done.

The bottom line is to not think first about how much you can gain but how much you stand to lose. Knowing how much you stand to lose on any given trade is the only way to help you decide if going for 10 pips is worthwhile.

Hope this helps

If you are referring to how to talk relate trading results and/or risk from trader to trader, then you have to use the base figure unless you know for absolute sure that everyone is trading the exact same size. That’s probably never going to be the case, so it makes much more sense to say 100 pips and let folks do the math based on their size.

Thanks guys!

I did not ask the question to say anyone is right or wrong. I wanted other people who view this forum to get a little something from everyone here. You both are correct. Your trade style, and risk reward ratio will make a difference. If I am trading lots that control $1,000, and another is trading lots that control $10,000 lots, then 10 of my lots is equal to 1 of the other. There are so many things to consider.

Thanks again!

I’m going to have to disagree.

If you are talking about pips, you are by definition referring to price moves, not account changes. “I made 100 pips on EUR/USD today” means I captured a 0.01 change in the EUR/USD exchange rate. It doesn’t mean I grabbed 10 pips on a 10 lot. Why is that? Because it lets us all talk in consistent terms.

If we start talking about pips made in terms of price moves multiplied by lots, things become completely worthless. Your example is a prefect one to explain why. A $1000 position is not considered a lot. Neither is a $10,000 position. A lot is considered 100,000 units. Then there’s Oanda which doesn’t have fixed trade sizes at all.

Were we all to talk pip results the way you refer to it (pips x lots) then we lose any common ground. If you tell me you made 1000 pips this month, I don’t know what that means at all. First off, are you talking just about price moves, or are you saying pips multiplied by your lot size? If the latter, how many lots did you trade? If I don’t know both those things, I can’t translate your performance in to something that means anything to me at all.

If it’s trading returns that we are talking about, the only real way to be able to have a consistent and understandable conversation is to use percentages. Doing so puts everyone on the same terms.

I gotta agree with John on this one.

A pip is the smallest change in price for a given currency pair. It has nothing to do with the number of lots that you used on your trade.

It causes nothing but confusion when people use the pips x lots equation when presenting their trading results.

Everyone has a different sized trading account and therefore is using different sized lots to trade with.

The only way to compare performance between people with different accounts is to use pure pips.

Of course, things become slightly more complicated when you close out half your position after x number of pips, and then close out the remainder of your position at y pips. How many pips did you make?

Sometimes just stating the number of pips gained is not enough. It’s necessary to know the gearing of the original trade and what portion of the trade is closed at each profit target. If a trade can be partially closed then this information needs to be disclosed when presenting any trade results.


Great observation!

I have the problem of adding and subtracting from a long or short position depending on what happens with price action. My live account (and all demos) pay between 8 an 10 cents per pip. So after I close the trade I take the cash value say $19.50 and divide by 9 cents for a close average on how many pips I made. (In the [U]post your pips[/U] thread I divide by 10 cents) So when people talk of “true pips”, “pure pips”, and “real pips”, I can not answer the question without lots of analyzing. I take the gains subtract the losses (usually that is a positive number for the day) divide by .09 and that is what I use as my pip count. In all fairness about half of my trades are 1 lot by so many pips. Other trades are 2,3,5,10,whatever lots by so many pips. Thanks for understand the difficulty with pips. Most people hammer me and I usually get angry at them.

Thanks again!:slight_smile:

That is exactly why I have said that using % returns rather than pips should be the way to go. It’s much easier for everyone to understand and relate to their own trading. Pips just provide enough information when used to refer to trading results.

As has already been noted, there is the issue of multiplying (or dividing) as well as split trade closure considerations. Even if we know that the pips posted are for a one lot trade held start to finish, we don’t know what they mean in real terms. A 100 pip trade can mean a lot of things depending on the size of the position and the size of the trading account.

In the final analysis it’s the actual money that’s made and at risk as a percentage of total account size that matters to anyone because that is what dictates trading performance.


Awesome stuff.

I like your opinion. I believe this thread will help new people coming to babypips.

This has been a well rounded discussion.:slight_smile:

I had no idea why anyone would care as long as they were growing there account. Rhodytrader, you are one of wisdom yourself.