Monday, 13 October 2014

Counting Pips or Dollars?

Don't count your dollars before you have made pips.  Measuring your goal and success in dollars can be a serious mistake for traders.   Sure you are in it to make money.  You are also in it to make profit.  That profit you should count in pips.   Just like you don't count your chickens before they hatch. You don't count your dollars before you can make pips.

Pips are scalable (to an extent, more on that later).  Money is not.  If you are thinking constantly about money then you are developing a bad habit.  It's the wrong mindset to have. It can be very damaging.  Not everything is about money.  Sure money helps a lot but it isn't everything.  You need to focus on profit, in pips.  Then and only then can you truly analyze your performance.  In Pips.  Over the month. Over the quarter. Over the year.   And then and only then can you put some dollar figures to it BUT you need to also keep your risk reward ratio in check and know your emotional threshold.   You don't want to overextend yourself.