Ridiculously stupid question about counting pips

[diy_]

Could someone out there clarify this please. If I bougth 2 lots at say 6000 with tp at 6020 that woud be 20 pips ok now if I bought 1 lot at 6000 and 1 lot at 6010 with both tp at 6020
would you say thats 20 pips + 10 pips =30 or would you say thats still 20 pips?

 

[Hoggums]

This is why counting pips is pointless - it takes no account of risk and the size of the trade.

Start adding up percentage gains on your account. It the only one that really matters.

 

[Chartsy]

pips in general are meaningless but in a way it could be important as you might find pretty soon you're totally over leveraging, 10% in a day is great, but when 1 pip=10% and you hold over the weekend...

 

[trader_dante]

Could someone out there clarify this please. If I bougth 2 lots at say 6000 with tp at 6020 that woud be 20 pips ok now if I bought 1 lot at 6000 and 1 lot at 6010 with both tp at 6020
would you say thats 20 pips + 10 pips =30 or would you say thats still 20 pips?

I would count that as 15 pips.

I would add up the total number made and divide by the number of lots.

This is why you have to be careful when vetting vendor results for example.

Many traders will record a 1 lot at 6000 and a 1 lot at 6010 with a fill at 6020 as 30 pips. That is a complete scam in my opinion.

 

[redart]

I'd call it 15 too, for what it's worth

 

[Hotch]

I'd call it 20 to be awkward.

Also, as above, counting pips are useless when trying to look at return, so the only reason I would be using pips is to measure how much of the moves of a day I caught (20 pips in a 100 pip range is harder than 20 pips in a 1000 pip range). I see the 15 idea but I think it's trying to put a square peg in a round hole, pips are useless for return based calculations. Only really come into it when you're having liquidity issues.

 

[Shakone]

I'd call it two separate trades, at half your normal size. The first getting 20 pips and the second getting 10 pips.

 

[Christiaan]

I don't think how many pips you make is very important but instead the risk/reward ratio of the trades themselves.In your example if you risk 10 pips for both trades and with both trades you risk 1% of your capital.Then in one trade where you make 20 pips you will make 2$ per 1$ you risk or a 1/2 risk/reward ratio and with the other trade you have a stop-loss of 10 pips and you have a tp of 10 pips you will have a 1/1 risk reward ratio.

If 1% of your capital is 1$ then you will make with one trade 2$ and the other 1$.In total you will make 3$...does that make sense

My piont is pips themselves is not so important but what is important is your risk/reward ratio.In my experiecnce scalping systems and expert advisors in general has terrible risk/reward ratio.Does that explain it?

Excuse my english people keep telling me i'm dumb cause i can't spell but english is my third language.

 

[Black Swan]

I'd call it two separate trades, at half your normal size. The first getting 20 pips and the second getting 10 pips.

Yep.

 

[DDI]

I'd call it 30 pips given that you have clarified that you have done 2 lots. Otherwise I'd count it as 15

But it doest really matter as long as you use the same standard and formulae when you count losing trades.

 

[glyder]

I agree with BS & Shakone too.


Conversely If it had been one trade with half taken off at 6010 pips and the other half at 6020 I'd have called it 20 pips as one position was opened and thats the extent of the move caught.

 

[trader_dante]

I'd call it 30 pips given that you have clarified that you have done 2 lots. Otherwise I'd count it as 15

Brilliant.

I do a 1 lot at 6000 and get out of it all at 6020. I've made 20 pips.

I do 21 times the size (I'm a big swinging d*ck vendor) and crack 21 lots at 6000.

Because secretly I'm sh*t scared to hold this amount through to the trade conclusion (and of course I've got my pip count to send out in my viral marketing emails), I get out of:

1 at 6001,
1 at 6002,
1 at 6003,
1 at 6004,
1 at 6005
1 at 6006
1 at 6007
1 at 6008
1 at 6009
1 at 6010
1 at 6011
1 at 6012
1 at 6013
1 at 6014
1 at 6015
1 at 6016
1 at 6017
1 at 6018
1 at 6019

and of course 1 at 6020

And suddenly I've made 210 pips?

Wow, just think of the amount of subscribers I'm going to get...

 

[DDI]

Brilliant.

I do a 1 lot at 6000 and get out of it all at 6020. I've made 20 pips.

I do 21 times the size (I'm a big swinging d*ck vendor) and crack 21 lots at 6000.

Because secretly I'm sh*t scared to hold this amount through to the trade conclusion (and of course I've got my pip count to send out in my viral marketing emails), I get out of:

1 at 6001,
1 at 6002,
1 at 6003,
1 at 6004,
1 at 6005
1 at 6006
1 at 6007
1 at 6008
1 at 6009
1 at 6010
1 at 6011
1 at 6012
1 at 6013
1 at 6014
1 at 6015
1 at 6016
1 at 6017
1 at 6018
1 at 6019

and of course 1 at 6020

And suddenly I've made 210 pips?

Wow, just think of the amount of subscribers I'm going to get...

sorry am not taking performance of vendors into consideration here...obviously for them every signal is equal in terms of strength unless stated otherwise.

but for an individual its the profit that counts and not pip performance. I do spreadbetting and if I made 50 pips in one trade at £10 a pip, and then lost a total of 200 pips (in 2 other trades) at £1 a pip, I'd consider it a successful day!

depends what context you are looking at.

 

[trader_dante]

sorry am not taking performance of vendors into consideration here...obviously for them every signal is equal in terms of strength unless stated otherwise.

but for an individual its the profit that counts and not pip performance. I do spreadbetting and if I made 50 pips in one trade at £10 a pip, and then lost a total of 200 pips (in 2 other trades) at £1 a pip, I'd consider it a successful day!

depends what context you are looking at.

I agree. I guess that is what I am getting at. If you are recording in pips alone for your own records then I would think it would be most helpful to just divide the amount you trade (particularly if spreadbetting) against the size you traded it at.

E.g. If you make a trade at £10 a tick and the net result is £500, then you made 50 ticks.

But when you are vetting other peoples records its important to know how they are calculating them.

For example there is one fx room that says it guarantees 250 pips per month or your money back. It also says it achieved 10, 545 pips in 2010.

Beneath that it says:

Can you give examples of alerts?
GBPUSD Long 1.4485, Tp1+25, TP2 +55 = +80 profit

As far as I am concerned, that is 40 pips profit NOT 80.

 

[DDI]

I agree. I guess that is what I am getting at. If you are recording in pips alone for your own records then I would think it would be most helpful to just divide the amount you trade (particularly if spreadbetting) against the size you traded it at.

E.g. If you make a trade at £10 a tick and the net result is £500, then you made 50 ticks.

But when you are vetting other peoples records its important to know how they are calculating them.

For example there is one fx room that says it guarantees 250 pips per month or your money back. It also says it achieved 10, 545 pips in 2010.

Beneath that it says:

Can you give examples of alerts?
GBPUSD Long 1.4485, Tp1+25, TP2 +55 = +80 profit

As far as I am concerned, that is 40 pips profit NOT 80.

I agree. in that case it would be 40 pips. but if it has sl1 at -25 and sl2 at -55 and both are hit, would you count that as -40 pip or -80 pip loss ?

But I know what you mean. a friend of mine once said he is monitoring a system that has profited 8000 pips in one month..

 

[trader_dante]

I agree. in that case it would be 40 pips. but if it has sl1 at -25 and sl2 at -55 and both are hit, would you count that as -40 pip or -80 pip loss ?

But I know what you mean. a friend of mine once said he is monitoring a system that has profited 8000 pips in one month..

To be fair to that room it counts that as -80.

But if it doesn't stagger its stops then it is likely over inflating its results.

E.g You trade £10 a point at 6000:

TP1 for £5 is at 6010
TP2 for £5 is at 6020.
Stop for the lot is at 5980.

In this example, if you get stopped out, you lose £200. If it's a winner you only make £150.

But when you turn it into pips, if you get stopped out its a 20 pip loser. If it gets to the target you make 30 pips.

Which means that if you do that same trade 10 times and you win 50% of the time, the outcome is:

5 X £200 loss = £1,000 loss
5 X £150 win = £750 win

Total result: A £250 loss.

Obviously, the vendor reports:

5 X 20 pip loss = -100
5 X 30 pip win = +150

Total gain: 50 pips

The clients up 50 pips and down £250.

Welcome to the world of marketing spin ;-)

Everyone is happy apart from the client.

 

[diy_]

I agree. I guess that is what I am getting at. If you are recording in pips alone for your own records then I would think it would be most helpful to just divide the amount you trade (particularly if spreadbetting) against the size you traded it at.

E.g. If you make a trade at £10 a tick and the net result is £500, then you made 50 ticks.

But when you are vetting other peoples records its important to know how they are calculating them.

For example there is one fx room that says it guarantees 250 pips per month or your money back. It also says it achieved 10, 545 pips in 2010.

Beneath that it says:

Can you give examples of alerts?
GBPUSD Long 1.4485, Tp1+25, TP2 +55 = +80 profit

As far as I am concerned, that is 40 pips profit NOT 80.

The reason I asked the question was that I was looking at some emails about an EA and the figures look pretty impressing but was trying to figure how they got so much pips in one day, so I came up with the conclusion that if they open 10 trades on the same instrument at example 6000 and close them all at 6010 they would count this as getting 10 * 10 = 100 pips, I was just wondering if they were correct
diy

 

[Black Swan]

Tom, the lad only wanted a simple answer 'cos he was a bit confused like, he didn't want or need your "confessions of a vendor"..but heh thanks for sharing...

 

[trader_dante]

The reason I asked the question was that I was looking at some emails about an EA and the figures look pretty impressing but was trying to figure how they got so much pips in one day, so I came up with the conclusion that if they open 10 trades on the same instrument at example 6000 and close them all at 6010 they would count this as getting 10 * 10 = 100 pips, I was just wondering if they were correct
diy

Don't fall for any marketing scam regarding pips.

Any EA or trading room or anyone selling you signals should provide you with the following:

Win Probability (make sure that break even trades are not included as wins)

Losing Probability

Average Winner in £/$ (They can do this at a fixed ratio: e.g. If a 2 lot was traded on every trade)

Average Loser in £/$ (same as above)

R value

Expectancy

Anyone that can publish a pip count can publish these stats too.

If the figures are good, you're good to go.

 

[brettus]

Re: Ridiculously stupid answer

Could someone out there clarify this please. If I bougth 2 lots at say 6000 with tp at 6020 that woud be 20 pips ok now if I bought 1 lot at 6000 and 1 lot at 6010 with both tp at 6020
would you say thats 20 pips + 10 pips =30 or would you say thats still 20 pips?

No penguins cant fly.