collapse

Author Topic: FOREX FUNDAMENTALS - Currency pair different from Account currency  (Read 5259 times)

Offline JIMGREEN

  • Jr. Member
  • **
  • Posts: 27
Dear Donna,

I'm being a little lazy here, but it's "Ask the Expert" which drives me to ask you this....

My account currency is USD and if I trade the EUR/CHF pair, how do I translate pip values to USD ? Online pip value calculators just give me results, but I don't yet understand the steps of calculation.

kind regards,

JG

Offline admin

  • Full Member
  • ***
  • Posts: 473
    • donnaforex.com
Re: FOREX FUNDAMENTALS - Currency pair different from Account currency
« Reply #1 on: April 28, 2009, 06:20:41 AM »
Hi JG,

Here are the calculations, using EURCHF as an example:-

If you are placing a buy trade of size 1 lot on EURCHF this means you are purchasing 100,000 CHF, since 1 lot is always equal to 100,000 units of currency.

1 pip movement in the market at 1 full standard lot is always equal to 10 units of currency

In this case, 1 full standard lot of EURCHF means that every pip move is worth 10CHF

Now all we need to do is work out how much 10CHF is in your account currency, USD. As i write this, the exchange rate for USDCHF is 1.1565, meaning for every 1 dollar you can buy 1.1565CHF.

Therefore:-

pip value in USD = 10 / 1.1565
Which gives us a figure of $8.65 per pip

-----

So, that is the basic calculation. Note that if you are trading a mini lot, the per pip value is 1 unit of currency per pip, and a microlot (0.01 standard lots) is 0.1 unit of currency per pip. Always remember to keep your calculation relative to the currency pair you are looking at and only convert it to USD at the last stages. A simple and quick way to convert from CHF to USD at the end, and cut out a step, is to go to google and type in "10USD in CHF" - google will actually work out the calculation for you then ;-).
« Last Edit: April 28, 2009, 06:22:13 AM by admin »
<b>Subscribe to my mailing list for updates, go to www.donnaforex.com</b>

Offline JIMGREEN

  • Jr. Member
  • **
  • Posts: 27
Re: FOREX FUNDAMENTALS - Currency pair different from Account currency
« Reply #2 on: April 28, 2009, 07:17:14 AM »
Perfect. Thank You Donna. I will work this into the LRR.xls.

kind regards,

JG

Offline hybrid

  • Full Member
  • ***
  • Posts: 425
Re: FOREX FUNDAMENTALS - Currency pair different from Account currency
« Reply #3 on: April 11, 2016, 01:19:19 PM »
Its not an issue which currency you had in your trading account ,there are lot of currency pair to trade in forex market we can not open account each of them .It is up to your broker how he deals with different pairs . You have to just select and trade in any of them.

 

browse forum