Counting pips

[bobnat]

I'm curious as to how others would view this particular situation.

You short 3 lots. You take one lot off at 20 pips profit another at 80 pips profit then are stopped out at BE on the final lot.

How would you count it?

Nat

[peteuk]

Originally Posted by bobnat

I'm curious as to how others would view this particular situation.

You short 3 lots. You take one lot off at 20 pips profit another at 80 pips profit then are stopped out at BE on the final lot.

How would you count it?

Nat

Hello bobnat

To be absolutely correct I guess in % of equity terms as it's the only meaningful number imho.

As an actual market move it would have to be the difference between entry exit price.

To impress others each lot could be counted individually it looks good on a results spreadsheet but I think most people are wise to this by now.

Why do you ask?

[bobnat]

Originally Posted by peteuk

Hello bobnat

To be absolutely correct I guess in % of equity terms as it's the only meaningful number imho.

As an actual market move it would have to be the difference between entry exit price.

To impress others each lot could be counted individually it looks good on a results spreadsheet but I think most people are wise to this by now.

Why do you ask?

I agree only equity really matters in trading.

I ask because I know a guy who is selling signals he ran into this situation last week he asked me how I would count it. My initial response was basically the same as yours but he needs to be able show something. his perspective his customers made money even though they got stopped out the original entry he wants to be able to say "We made xx pips". it makes sense in a way because he has no idea or control over how much equity his customers risk or win. The more I thought about it the more curious I became hence why I asked how others would view it.

Thanks for the response.

Btw it's been some time since I've seen you around here. I hope all is well with you.

Nat

[astro]

Hi Nat
Here's the way I do it (I trade with Oa have to convert the P/L numbers to pips manually because of their lousy transaction history):

1. Determine your "Base Lot Index" which is the % of the account you trade. So if trading X% of your account is 3 lots then 3 is your "Base Lot Index".
2. In order to calculate the pips gained (relatively to the trade size) use the following formula:

Pips(adjusted) = Lots closed * Pips / "Base Lot Index"

In your example you closed 1/3rd of your position at 20 1/3rd at 80 the rest at BE so you gained:
(1 * 20 / 3) + (1 * 80 / 3) + (1 * 0 / 3) = 33.3 pips

Note that if you multiply the result by the "Base Lot Index" you get the "absolute" pips: 33.3 * 3 = 100.

Astro

[bobnat]

Astro

Thanks that makes a lot of sense. I also use Oa I've complained about their accounting methods a few times...to no avail.

Nat

[peteuk]

Originally Posted by bobnat

I agree only equity really matters in trading.

I ask because I know a guy who is selling signals he ran into this situation last week he asked me how I would count it. My initial response was basically the same as yours but he needs to be able show something. his perspective his customers made money even though they got stopped out the original entry he wants to be able to say "We made xx pips". it makes sense in a way because he has no idea or control over how much equity his customers risk or win. The more I thought about it the more curious I became hence why I asked how others would view it.

Thanks for the response.

Btw it's been some time since I've seen you around here. I hope all is well with you.

Nat

Very well thank you Nat I hope all is well with you also. I see most of the old members have gone which is a shame.

Signal sellers usually have their own way of making things look good on paper but wouldn't 3 lots short the same price be one trade? I guess another way of calculating it would be to average the + pips +20 +80 +0 / 3 = 33 that way he could also express results in terms of a meaningful risk:reward.

Who am I kidding ROI R:R is not top of the list for most signal buyers (smile)

[cornellj]

Hi Bob

In my business I make use of a stard lot size principle to ease the calculation.

In your example I would suggest the stard lot size to be one lot. If I entered 3 lots that would be 3 times the normal size. If I then calculate my pips it would be 1 lot made 20 1 lot made 80 1 lot made nothing. On my stard lot size of one the pips would be 100.

If my stard lot size is 300 in one lot the pips would be 33.3 as calculated the calculation is more difficult in this instance as more factors are involved.

I try keep the calculations to the minimum use a stard lot size approach make trades in the stard or multiples of the stard lot size. The stard lot size is based on money management principles. If I have a position within a trade of three times the normal lot size the single pips made will be three times that of a stard lot over the same pipmovement.

I do not wish to add to confusion but found that using this approach eases the calculation of the number of pips profit made per trade by extension per month.

Regards.

[bobnat]

Thanks for the feedback everyone. It's just like everything else in trading you've got to find what works for you stick to it.

Nat