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Author Topic: How to compute pips  (Read 2427 times)

Offline "Ancient Mariner"

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How to compute pips
« on: June 05, 2009, 05:39:37 PM »
This question will appear dumb, but here goes.
I see,  all the time, somebody saying that their profit/loss was a certain number of pips or that the target most traders try to reach is a positive pips of 200. I don't know how to equate the USD amount I am making/losing to pips. I suspect that pips are some kind of universal  figure that allows one to calculate in any currency.
Will somebody help out a slow learner?
Wouldn't be nice if the platform had a column for pips?
"Ancient Mariner"

Offline EAtrader

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Re: How to compute pips
« Reply #1 on: June 06, 2009, 09:18:04 PM »
pipvalue
if eur/usd is at 1.4000, the last digit is called a pip.
if price moves to 1.4001 it has moved one pip.

why not use point?
pips vary in value dependig on the price

in a $ account 1 pip eur/usd is $0.01 $0.1 etc depending on the amount you are trading with.
in a euro account 1 pip eur/usd is € 1/1200 (x the amount you trade with)  if price eur/usd is 1.2000
in a euro account 1 pip eur/usd is € 1/1600 (x the amount you trade with)  if price eur/usd is 1.6000

if you see eur/usd=1.40000 (5 decimals or " pipettes" ) you have to ignore the last one if you are talking about pips.

and one more complicating factor, the misleading terms mini, micro- account etc:
always check in your demo account what is the smallest tradesize and what is the profit or loss of 1 pip.

Interbank fx $ account smallest tradesize 0.01lots: 1 pip=$0.01
Alpari UK € account 0.01 lots: 1 pip approx = 0.08 € (depending on the price of eur/usd)

hope ths helps..
EAtrader

Offline "Ancient Mariner"

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Re: How to compute pips
« Reply #2 on: June 07, 2009, 12:33:02 AM »
I helps, yeah. Does everybody go thru these machinations when they gleefully report that they have gained 200 pips. I seems, to me, you almost need an accountant to keep track of this..
"Ancient Mariner"

 

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