Forex Signals: Why Pips Aren't Important

Regardless of whether you want to become a currency trader by taking a home study course, using a Forex system or subscribing to a Forex signal provider, it appears everyone is obsessed with pips. People are always concerned about the number of pips you can make. This trading system does X number of pips a month. This trader makes Y number of pips during the New York session. This signals service banked Z number of pips in the last year.

Here is a video about why pips are not that important when looking for a Forex signals provider...

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It might be a shock for some of you to learn that the number of pips is not a good measure about how well a trader, system or signals service performs. Of course, you must have a positive amount of pips to be profitable. But just looking at the number of pips does not tell you what system or service is most profitable.

Honestly, you want to trade currency to make money, right? You can't fill your car up with gas and pay with pips. Pips don't exist or have value in the real world, only money does. So, shouldn't everyone be talking about profits?

This is how they get away from talking about profits. They don't talk about profits because everyone is going to be using a different size trading account, and different money management rules. Therefore, everyone's profits are going to be different. Same amount of pips, but very different returns. So, people concentrate on pips because it will be the same for everyone.

The problem most people don't realize is, knowing the number of pips a trader, system or signals service makes is not sufficient information to know how much money you can make. After all, a pip is going to mean one thing for a person with a large account compared to a person with a small account. Plus, how big the stop loss and the lot size value also plays a role in determining what the value of each pip is.

The best way to look at performance is percentage based. If a trader, system or service made 5% and you did the exact same thing, you should expect get the same 5% gains. Obviously, in terms of pips and percentage you would be getting the same, but what profits that equaled would be determined by your account balance. (Best Forex Trade Signals is one of the few signals services that gives you everything you need to duplicate both pips and percentage gains).

This is why I think why so many traders, trading system and signals services only talk about pips. The reason I think this is happening is because when they show their results as percentages, they don't look that great. They would rather spout off high pip gains (which mean nothing) than show real percentage gains (which aren't very impressive).

When you look for a trader to follow, a system to trade with or a Forex signal provider to join, probably want to make the same gains they are reporting. This depends more on the percentage gain they are getting than the number of pips they are reporting. So, seek out services that show their gains in percentage gains and provide the opportunity to duplicate not only pip values, but percentage gains as well.

Best Forex Trade Signals is one of the few signals services that helps you get the same percentage gains as the master signals account. Performance is measured in percentage gains and losses and is completely transparent through a 3rd part statement publisher. You should be able to see how the percentage of your account you can make is better than focusing on pip values.