PIPS, Percentages, or Money

PIPS, Percentages, or Money

What Matters most in Forex trading?

At the beginning of your trading journey, especially in trading the Forex markets, all you think about is money, flashy cars, jewelry, and big houses like every Forex trader’s lifestyle!

It is not. I wish I knew earlier what it would take to be a successful Forex trader and what exactly mattered the most. I probably would have jumped over a couple of hurdles smoother without the embarrassment of tumbling over a few times.

Do I regret anything? I don’t regret anything because the mistakes taught me everything I know now, and I am better for it. On my journey, I learned what MATTERED for ME according to what my end goal would be.

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So what is it that matters when trading the Forex markets?

The answer to this question is dependent upon the person and their goals. However, whatever you focus on will reflect in your results. If all you focus on is money and not the process it takes to get to an OUTCOME, whether that outcome is desirable or not is irrelevant, you may take longer to succeed in the Forex industry.

With each stage of the Forex trading journey, your priorities change. It was about the money; now, that’s not to say it didn’t work out entirely because it worked out for a while. Over time the goal changed; it became more about personal development and growth.

When I looked at it this way, it because less about the money and more about the PROCESS of making money. So I started focusing on the number of PIPS I could catch in a day. Paying attention to the number of PIPs allowed me to focus on a risk to reward ratio that yielded the best outcome while developing my skill-set in the Forex markets.

The benefit of thinking in percentages is that it gives a level of consistency. You know that you are only risking 1 or 2% of your equity when it comes to risk, and you stand to make 2, 4, or even more in percentage returns.

A friend of mine always says you cannot tell you’ve made a profit from the Forex markets unless the bank shows the money. I also, to some degree, believe this to be true because that is the only time you have something to show for your efforts. That is the reward you have received for sticking to your plan and being disciplined.

It is imperative to think of profit this way because it is effortless to allow the steep incline in the equity curve to fool you into thinking you’re the best there is in the game. The issue with this is that it gets to your head, and if you aren’t careful, greed, fear, ill-discipline, and even gambling could occur. All these are leaving you in an entirely horrible position.

So, where do we focus? Money? PIPs? Or Percentages?

Again, it depends on you, but my personal belief is that it is always best to think of trading the Forex markets in probabilities and therefore focus on percentages – no matter how volatile the equity curve may look along the journey.

Percentages over PIPs,

PIPs over money,

Trust the process, and the money will come.

 

Happy trading, fellow Traders!  

PIPS, Percentages, or Money FAQ

A PIP, standing for percentage in points, is the unit of measurement to express the change in value between two currencies.

Focusing on a percentage growth allows you to foster consistency in risk and helps distract you from the money aspect of trading, detaching you from the emotions. 

There are many prop firms across the world right now but to name a few;

  • FTMO
  • Funding Talent
  • MFF 
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Emmanuel Maphosa

Emmanuel Maphosa

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