Calculating pips, my heads sore

indiana · Jan 6, 2010

Hi Anyone,

Can someome help me with my pips calculation below

entered us/jp short at 91.95 with 2 lots of 10p each = total 20p trade

took profits at 91.58 and left 10p on the trade

i then closed trade at 91.65

So how do i calculate the pip count

from open of 91.95 to 1st profit at 91.58 = 37 pips, right or wrong
Then closed trade at 91.65 (opened trade at 91.95) = 30 pips, right or wrong

so then my total pip count should be 67 pips, is that right or have i got it wrong somewhere

Any help appreciated

Paul B

mb325 · Jan 6, 2010

Well if you close half a trade you're halving the pips on that part of your stake.

So you closed first half for 30, so 15 pips of your initial stake.

Second half for 37, so 18.5 pips of your initial stake.

Overall you made 15 + 18.5 = 33.5 pips. Easier just to find the average, (37+30)/2 = 33.5

E.g. £5/point long at 100, close half at 105 = 5x£2.50 = £12.50, close final half at 110 = 10x£2.50 = £25. Overall you make £37.50 i.e. £5x7.5 pips. You made 10 pips on one half, 5 pips on the other, (10+5)/2 = 7.5 pips at initial stake.

indiana · Jan 6, 2010

mb325 said:
Well if you close half a trade you're halving the pips on that part of your stake.

So you closed first half for 30, so 15 pips of your initial stake.

Second half for 37, so 18.5 pips of your initial stake.

Overall you made 15 + 18.5 = 33.5 pips. Easier just to find the average, (37+30)/2 = 33.5

E.g. £5/point long at 100, close half at 105 = 5x£2.50 = £12.50, close final half at 110 = 10x£2.50 = £25. Overall you make £37.50 i.e. £5x7.5 pips. You made 10 pips on one half, 5 pips on the other, (10+5)/2 = 7.5 pips at initial stake.

Thanks for that,

I understand now and probably the best way to do it is to close trade overall and if i have banked profits to take open of trade and final close of trade and then divide by half

Paul B

mb325 · Jan 6, 2010

Easiest way I find is pretend your trade is actually 2 identical trades at half the size.

So overall size is £5/point. Pretend you have 2 positions of £2.50 a point, then when you close one half just multiply pips by £2.50.

indiana · Jan 6, 2010

mb325 said:
Easiest way I find is pretend your trade is actually 2 identical trades at half the size.

So overall size is £5/point. Pretend you have 2 positions of £2.50 a point, then when you close one half just multiply pips by £2.50.

So if you made 50 pips then that's £2.50 x 50 = 125 pips, is that right?

and if i made 50 pips at 10p per point that's 10p x 50 = 5 pips ?????

Thanks for your help by the way, snowed in here so bored

Paul B

mb325 · Jan 6, 2010

indiana said:
So if you made 50 pips then that's £2.50 x 50 = 125 pips, is that right?

and if i made 50 pips at 10p per point that's 10p x 50 = 5 pips ?????

Thanks for your help by the way, snowed in here so bored

Paul B

£2.50 x 50 would be £125, not 125 pips.
£0.10 x 50 would be £5, not 5 pips.

I think you're getting confused over what a pip is. Read this http://www.traderslog.com/pip/ .

So a pip is basically the smallest unit of price change possible for a given instrument, and you should be 'sizing' your bets such that you know how much you are staking per pip. If you're spreadbetting a 'pip' is also sometimes known as a 'point', they're interchangeable.

Formula: (Number of pips) x (£ Bet size) = £profit or £loss

So if I make 100 pips at £5 per pip i make 100x5=£500

If however I make 100 pips on the first half of my £5 stake, and 200 pips on the second half of my stake, I've effectively made 100 pips at £2.50 (first half), and 200 pips at £2.50 (second half). Applying the formula above and adding them gives £750.

foredog · Jan 6, 2010

Forget all this pips nonsense, it seems to be confusing you, just think in simple terms, pip/10p/lots etc it doesn't matter.

If you sell 20p at 91.95

buy 10p at 91.58 (+37 = £3.70)

buy10p at 9165 (+30 = £3)

so a total of £6.70

or an average of 33.5 points/pips/pence etc. per 10p lot

indiana · Jan 6, 2010

mb325 said:
£2.50 x 50 would be £125, not 125 pips.
£0.10 x 50 would be £5, not 5 pips.

I think you're getting confused over what a pip is. Read this http://www.traderslog.com/pip/ .

So a pip is basically the smallest unit of price change possible for a given instrument, and you should be 'sizing' your bets such that you know how much you are staking per pip. If you're spreadbetting a 'pip' is also sometimes known as a 'point', they're interchangeable.

Formula: (Number of pips) x (£ Bet size) = £profit or £loss

So if I make 100 pips at £5 per pip i make 100x5=£500

If however I make 100 pips on the first half of my £5 stake, and 200 pips on the second half of my stake, I've effectively made 100 pips at £2.50 (first half), and 200 pips at £2.50 (second half). Applying the formula above and adding them gives £750.

wow, i think i had a senior moment there, did men £'s instead of pips and thanks for your help

Paul B

indiana · Jan 6, 2010

foredog said:
Forget all this pips nonsense, it seems to be confusing you, just think in simple terms, pip/10p/lots etc it doesn't matter.

If you sell 20p at 91.95

buy 10p at 91.58 (+37 = £3.70)

buy10p at 9165 (+30 = £3)

so a total of £6.70

or an average of 33.5 points/pips/pence etc. per 10p lot

Yep,

maybe your right as £'s count in the ban, not pips at the end of the day and i welcome all sides of this debate

Thanks for your help

Paul B

GammaJammer · Jan 6, 2010

generally fyi, apart from those who really don't have the first idea, traders don't talk about 'making pips' in that kind of way. Firstly they usually don't call them pips, but that's not all that important. Secondly, the pros will generally talk about making 'x' points on 'y' stake / trade size / whatever

So no-one would just say 'hey - I made 25 pips'. But they might say 'I made 25 pips on the first ten pence, and 69 on the second ten'. After that it doesn't matter whether you choose to call that 94 points on 10p or 47 points on 20p. Means the same in money terms at the end of the day. And THAT is what it's all about. The other relevant thing to talk about is account size, to determine how much leverage you're using to garner a given hard monetary return.

Hope that helps

GJ

Calculating pips, my heads sore

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