Hello all, When traders either discuss gains or losses they choose to quote points or dollars. I prefer to use the measure of dollars, I may change that in future depending on which is perceived as best practise. Which do you use and why.
Ticks but sometimes include the amount of contracts to make it more understandable on the size of a move. I try to work less with dollars because of the mindset problems it causes.
Points (or pips) only makes sense if you trade the same unit count on each trade and the point value is also the same, i.e, you only trade 1 contract of DAX. Otherwise, dollar makes more sense. Earning 10 points on 1 contract DAX is not comparable with 10 pips on 1 lot EURUSD, but dollars are always comparable. Also, to me, I really don't care the points/pips, I only care how much the money I earn/lose.
So if I were to say" I was down 35 points on the DAX then made it back then lost another 35 points then ended the session +5 Or would you prefer I said, " I was down 1600.00 on the DAX then made it back then went down to 1600.00 again, then ended the session with +192.00 Which version is preferred ? or which version makes me look like a better trader .... lol I'm laughing over here : ) just kidding ... but ... What I just described actually happened few sessions ago, I don't know if that's the sign of a good or bad trader !
Well I think it goes without saying that you reference the instrument. For instance, I scaled out of the last contract on a 2-lot ES short for 150 ticks total yesterday. I just prefer to work without the dollar figure in the foreground as it places explicit importance on the dollar amount - something traders should be learning to move away from while actually trading. It also gives some idea of the move if traders are also familiar with the same instrument. For performance figures (monthly, weekly, yearly), etc. then dollars might make sense - but percentage might make more sense as well there.
Yes the highlighted bit is very important during a trade. There have been times where I close my open positions viewer due to the nature needing to focus on price action. It could also be that if talking to another trader to find out what he/she prefers before carrying on, each to his own. I appreciate the rest of your input.
You cannot use either. 1000$ can come from trading leverage 1 or 100. So you should know the leverage. 10 points can be done trading 1 contract or 1000 contracts. So you should know the size. What instrument is traded should be mentioned too. Value of point is different everywhere and percentage wise 1 point can have a very different value. These are only a few problems, but there might be many more. I prefer to see a chart of the performance. It shows profit or loss, drawdown and consistency of the trades. When I traded forex the performance was expressed as (USD/DEM) 0.75. That was the profit you made compared to the currency you trade. Which was in this case 75%.
My guess is once defining an instrument, "Points" should be right for performance measures, based on an implied convention to describe how much "Movement" that a trader produced (positively or negatively) for a trade, disregarding what leverage strategy, options strategy, money management strategy, and others were used for the trade. Just 2 cents!
I prefer basis points (BPS). That way, trades in any instrument can be compared. At the moment, 100 BPS on the ES equates to about 21 points, whist on the Dax it's more like 110.
If you stay in the same instrument points are good. But I agree that for comparing performance over all kind of instruments BPS is better.