How Many Pips Per Month Is A Great Result?
Profit/month
I think any profit in forex is good. 100 pips per month is very good and 300 pips is outstanding. Most people make money for a short period and give all back. So I think 1200 pips a year is very good and 3600 pips outstanding. Do it for 5 years and you know you have an excellent trading system.
Regards
Derikb
I would like to get some indication of many pips per month generated is a great result? I am not concerned with lot size but would like to get a rough idea of what amount of pips per month would be average, great and outstanding...I would appreciate any guidance. Thanks James
Hi jamespolis,
If I can help you a little bit then that is not the correct question you asked.
The amount of pips one makes is of no importance.
It is the amount of pip one makes devided by the risk he took that is important. Or better known as reward/risk ratio.
I gonna try to explain myself with 2 extreem examples. Extreems have the tendency to picture it better.
Lets say that someone makes an average of 1000pips per month (again it is an extreem example) but he has on a regular base in between drawdowns of 500 pips. That means that his reward is 2 x the risk he is exposed to.
That means he will need to place his value per pip in such a way that if he looses 500pips that he does not burn his account.
An other guy makes makes daily ONLY 5 pip and never has any losses ( again also here impossible but only as an extreem example).
That means that he only makes +/-100 pips in a month but he does not have any draw down. But that also means he does not have any risk what so ever.
That means he can boost up his value per pip to the absolute maximum. Every day he can trade with everything he owns in his life.
The guys who makes only 100pips in a month is going to make a lot more money then the guy who makes 1000pips per month because he needs to take in account that he can also have temporary drawdowns of 500pips.
To answer your question or try to help you is that you always need to look what the risk (drawdown) is of a praticular system in relation to the profits (reward) it makes. And most amateurs fail on this. They only look to the profits a system makes and place their leverage and value/pip in such a way that this would make them rich in no time. But the moment they face a bad period or serious draw down they burn half or compleet their accounts.
If you find yourself a system with a reward/rsik ratio between 2 and 5 over a longer period of trading (normally R/R ratio are calculated on a 3 year period) then you found yourself a good system.
That means if you trade of a 10.000$ account and if you have a system that has a R/R of 5 that you will need to place leverage and value per pip in such a way that if you loos or have a drawdown that you don't loos more then 25% of your account. That means that your end result at the end of the year will be 5 x as bigg as the risk that you took. That means 25 X 5 = 125% profit. That is extreemly good.
You will find some people who say or show these kind of results over a 1 month period. But ask them to show these results over a whole year and they will faill completely in doing so. Because they are way over-leveraged and the moment they encounter a bad period their account is burned.
Systems or people who claim that they would have a R/R ratio over 1 year period of 10 do not exist and I can only sujest to stay away from them. They are only theoretical and based on over-optimized back test.
friendly regards...iGoR
it is according the account size
if your account big , then 100 pip is very good
the other thing is skill
there are some people skill make about 1000 pip per month
Thanks IGOR for such a detailed and quick response, I appreciate your words of wisdom and guidance which obviously comes from experience.
I fully agree with Igor.
The number of pips per months is irrelevant, what is important is the risk reward ratio and returns and risks in % of your account.
I think that one of the first step that people need to master to become profitable is to understand that pips don't count, that you can be positive in pips and negative in your balance, to understand the effect of leverage...
Already when that will be clear to you you will have some advantage on the "pips chasers".
Personnaly I don't know how many pips I make per month nor how many pips I make in any single trade, but I know how much I get in % of my account.
For me a monthly average >= 5% (compounding that makes 80% a year at least) with an absolute max DD (including open orders) around 25-30% is a very good result.
I agree with you jlpi. I target 100 % ROI/year. (should be nice)
I can not stand that much DD however. I start to panic around 5% 
at 10 % I stop trading.
I just read this other thread here on TSD, look here about what other traders think about DD .
I agree with you jlpi. I target 100 % ROI/year. (should be nice)
I can not stand that much DD however. I start to panic around 5% at 10 % I stop trading.
Hi Pippperoni,
You say that you fully agree with jlpi but what you post is actually totaly different.
Jpli talks about a realistic way of trading. Meaning that he goes for an 80% profit in relation to a 25-30% risk. That is a very nice but still realistic expectation of 80/25= 3.2 R/R ratio or 80/30= 2.6 R/R (even more realistic)
You say that you have a target of 100% profit with a risk of ONLY 5-10%.
That emmidiatly becomes an impossible expectation of 10-20 R/R ratio.
Every Reward/Risk ratio of more then 5 is no longer realistic.
If you go for 100% profit that's fine but you need to support then a MaxDD of 25%-30%.
If you only want to go for a MaXDD of 5-10% you can only expect to make between 25-50% profit over 1 year.
But impossible to have the best of both worlds.
I still need to see the first system that can produce a R/R ratio of 10 over a whole year of trading. Meaning that it can make 100% profit and had only a MaxDD of 5-10% on the amount of the initial balance.
Meaning that if one starts of from 10.000$, he ends up after 1 year trading with 20.000$ and the biggest drawdown he had during that year was ONLY between 500 and 1000$ ?!... Sorry but that is not very lickely, even not to say impossible. If someone can do that 10 years in a row he would be richer then Warren Buffet.
If you can do that 3 years in a row, Warren Buffet is going to hire you emmidiatly as his top trader (and pay you accordingly)
Important is that I talk about an 100% mecanical system where the rules stayed all year long the same.
Friendly regards...iGoR
risk/reward
i have seen quite a few - systems that produce more than 100% per year with less than 10% drawdown.
but it will be too much to expect them to achieve this EVERY year for 10 years
unless of course it is always changing (and adapting) and it may not be anything like the system you begin with.
is warren buffet still looking for a system like this?
(pls beware past results are no guarantee for future performance).
Well said, Igor.
Many of us come to forex thinking to be rich fast and easy. Not fast and not easy. Learning, learning, learning. Working, working, working and most of us find that forex is a very hard work and mostly not rewarding in any way, thats why many just quit.
For those who keep trying, only a small % will find a profitable way of living. When that happens (IF it happens), you will discover that to be there you have invested a homungus amount of time, work and effort (much more than any regular job) and the dream to have an income to allow you to be your own boss and have more time with your family, was only that: a dream (at least in forex).
I am getting very good and sustained results now. But I have gived too much for that. Not rewarding. If I take too the personal side of this job, the DD is extremly high.
I agree with you jlpi. I target 100 % ROI/year. (should be nice)
I can not stand that much DD however. I start to panic around 5% at 10 % I stop trading.
Hi Pipperoni,
I was also a bit surprised by your figures of 5 and 10% of DD for a 100% return.
But maybe it was something different that you meant. Did you mean in one month? So that the DD cannot be more than 10% per month but it can be more over several months?
Because if you stop trading at 10% DD, what do you do next? do you look for another strategy?
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I would like to get some indication of many pips per month generated is a great result? I am not concerned with lot size but would like to get a rough idea of what amount of pips per month would be average, great and outstanding...I would appreciate any guidance. Thanks
James