If you ask me how much pips I made last month, I will tell you I don’t know.
But I will know my R-multiple of last month: a 6.1R profit. This R number often results in confused looks. What does R stand for?
In order to figure this out, we need to take a step back and look at our performance and its relationship with risk.
Risk and Reward To Risk
When you say that you made a 50 pip profit, that only tells me part of the story. The key piece of information that is missing here is how much you risked to make this profit. After all, a 50 pip profit is a good result if you had a 25 pip stop loss but if your stop loss was 200 pips, you risked a lot to get a relatively small reward.