One of the most irrelevant questions I get asked is, how many pips did you make during the week or during the month? It doesn’t matter how many pips you make. It is the wrong question to ask. Let me explain why.
Lets say the trader asking me the question made 500 pips during the month. Lets say I made 80 pips during the month. The trader that made 500 pips may have thought that they made greater returns, but that can be flat out wrong.
If that person positioned sized so that every 100 pips represented a certain % of their account, lets say 1%, then that trader made 5% return during the month. Those 500 pips represented 5% of their account.
Now let us take my 80 pip month. What if I positioned sized so that every 40 pips in my account represented 10% risk. That means that my 80 pips made during the month represented a 20% gain in my account. *Note that I am not recommended you go out and risk 10% per trade
That is how my 80 pips can beat some other traders 500 pips. It is not about how many pips you make, it is about how you position size.
The better questions to ask are:
1. What % risk do you use.
2. What % winrate do you have.
3. What is your average risk:reward rate on a series of trades (aka, how big are your winners).
4. What was your Risk reward ratio on a recent big successful trade.
Those are the questions you should be asking and wondering about, NOT how many pips did you make. Every time someone asks me that, I think of all the threads in the forums where the people tell you to blindly trade GBP/JPY and GBP/CHF because “they move a lot.” Yeah they might move a lot, but you pay higher spread and probably need to use bigger stops so that hurts R:R ratio, which is what matters in the end along with winrate.
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