Thread: How to correctly measure the pips won in an operation?

Measuring in contextless pips is like saying that you ate 3 dishes without saying what. Was it 3 salad or lasagna dishes? There is a huge difference. Well, the same thing with lots. You better start recording your operations as a professional: winning pips, lot size, and result in % on your account. So you'll know what part you need to improve.

There is a serious problem with how forex is taught on YouTube and networks: they all talk about pips as if they were tickets. �Today I won 50 pips,� yes, but with what lotage? At what risk? They don�t say that. I learned by the bad that you can have a strategy that accumulates pips and still melts the account for mishandling money. Don�t repeat that mistake, separate the concepts from now on.

I don't want to sound hard, but if you're confusing pips with monetary benefit, you need to go back to the basics. And I'm not saying it in the spirit of offending, but because that kind of confusion can cost you expensive. In the first few months it's normal not to be clear, but you should spend some time understanding the basics. There are thousands of free resources where they explain this to you with manzanitas.

Personally, I measure the success as a percentage of growth on my account, not in pips or dollars. Pipes are just a way to know if your technical analysis is working. But if every week you win 200 pips and lose 5% of your account because of over-leverage, you are doing something wrong. That�s why the important thing is not how much the market moves, but how you manage it.

Many people think that winning pips automatically is making money. But that�s only true if you have control of the size of your positions. If you operate without control, you can earn pips and lose money. It happened to me at the beginning. I became obsessed with taking out pips, and I didn�t notice the risk I was taking. When I wanted to realize, I had already burst two accounts.

The simple answer is: you won 10 pips. The complete answer is: you won 10 pips with a 0.2 lot position, which is equivalent to about $20. It�s not the same, but you don�t have to complicate it too much either. The important thing is to understand what you�re measuring for. Do you want to know if your analysis is good? Then the pips are enough. Do you want to know how much you�re actually earning or losing? Then you need to see the value per pip and the % of risk.

Don't get so close to technicalities. Win pips, adjust the risk, and don't get obsessed with metrics from day one. Most people don't even get to first year operating. First learn to survive. Then you'll see if you measure in pips, dollars, percentage or candy. But if you don't know how to stay afloat, it doesn't matter how much you know how to measure.

The pips are overrated as a measure of success. You can have a system that takes out 5 pips a day with brutal precision, and another one that goes for 50 pips with a ridiculous hit. Which is better? It all depends on your risk profile, leverage and your strategy. Measuring only in pips is simplistic. Trading is a game of probability, risk and consistency. Pipes are just part of that puzzle.

I've seen traders brag about their 100-pips won as if they were the holy grail. Then you ask them how much they actually won, and it turns out that they went in with 0.01 lots. There's nothing wrong with it, we all start there. But if you're going to measure your progress, do it with judgment.

It seems to me that the traders community gives too much importance to things that don�t make sense out of context. Pipes are neither good nor bad, they�re just data. The key is how you interpret that data. If you use them to improve your input and output, great. If you use them to brag on social networks without understanding what they mean, you�re on the wrong path.