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General questions How to convert Pips to percent gained/lost?
avatar Fxcarebear
Question by: Fxcarebear - 06 Mar 2015, 09:14:26
How to convert Pips to percent gained/lost?
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avatar user 4954
Answer by: Pipmaster - 06 Mar 2015, 09:27:12

percent gained or lost has nothing to do with the amount of pips someone has gained or lost, l shall explain: there are three factors needed to determine the money gained or lost by a trader 1. The average W/L of his trading 2. The Risk to Reward Ratio of his trading 3. And the % of his account that he risks per trade for instance lets say i trade an EMA cross system that has a win rate of 50%, that is the first piece of the puzzle And with this system i set my stop loss to 25 pips and my take profit to 50 pips (meaning i have a risk reward of 1:2, meaning for every dollar i am risking i am trying to gain 2) And with every trade i set my lot size to 5% of my account size (meaning if i have a $1,000 account i will risk $50 per trade, ie 5%), so if i had a $1,000 account i would trade with .2 lots per trade (because 5% of $1,000 is $50 risked per trade, so each pip of my stop loss which is the most i can lose needs to be worth 2 dollars) so my W/L is 50%, my RR is 1:2, and i risk 5% per trade, so lets say i make 50 trades in a month i win 25 trades and i lose 25 trades, each loss i lose 5%, and each win i gain 10% (because i risk 5% per trade and i aim to make double that on my wins, ie 10%), so my wins bring my account up 250%, and my losses bring it down 125%, meaning at the end of the month i am left with a profit of 125% my total account siz

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