Pip Values

Just learning...

I see that for major currencies (excluding Japanese Yen) pip unit is .0001
I also understand calculating pip value (in terms of money) is not that difficult.
ie. in case of EUR/USD:
(.0001 / exchange rate X lot size = ... x exchange rate = $....

Wouldn't it be handy to have money values of pips displayed say next to vertical price bar? All it needs 3 additional lot column (micro, mini and standard) pip values of corresponding lots next to the price bar.

Currently I'm looking at oanda demo account platform and I couldn't find such an option. Are there platforms displays pip values without invoking pip calculators etc.?

Another question...
My account is in US$ but US$ EUR pair displayed as EUR/US$ I'd have thought it would be other way around - US$/EUR, even though I choose US$ as my base currency. Perhaps I'm missing something here.

bob1408 said:

Wouldn't it be handy to have money values of pips displayed say next to vertical price bar? All it needs 3 additional lot column (micro, mini and standard) pip values of corresponding lots next to the price bar.

Currently I'm looking at oanda demo account platform and I couldn't find such an option. Are there platforms displays pip values without invoking pip calculators etc.?

Click to expand...

Oanda doesn't have any fixed lot sizes, so the thought you have wouldn't work for them. Spend enough time working with things and you'll know (in the cased of USD-quote pairs) or be able to make a good guess on the pip value for the size position you want to trade.

Another question...
My account is in US$ but US$ EUR pair displayed as EUR/US$ I'd have thought it would be other way around - US$/EUR, even though I choose US$ as my base currency. Perhaps I'm missing something here.

Click to expand...

Standard market convention. It has nothing to do with your account settings.

Thanks a lot Rhody Trader.

When I go live I'm planning to trade in only EUR/USD pair (assuming EUR still will be around by then). I'm looking the live data and see price going up and down say 1.2360 to 1.2370. What kind of quick mental calculation I can make instantly to see that 10 point approximately equals to x amount of pips?

Very easy. For all pairs where USD is the quote currency (second in the pair - XXX/USD) the value of a pip will be $0.0001 x Size, or Size/10,000. So, for a full contract that's $10/pip. For a mini it's $1/pip.

Hi Bob, I understand the desire to see actual monetary values while you are trading..

I personally have found that looking at the actual dollar amount tends to play with your emotions a little more. Instead I keep the monetary values hidden and only look at the actual pips. now its just a points game, I can scale up once I am consistent at getting 20 pips/day. but if i am used to making $200, then when i increase my lot size I might act differently when i am looking at a whole new set of dollar amounts.. but pips will be consistent for the life of your trading career.

I dont want to deal with shock value when i increase my lot size and then panic duuring a negative floating trade. but i always know where i am at as long as i am only using pips.

plus, you have enough stuff to keep track of while you are trading. dont worry about the dollar amount... It's a trap..

But what you must do is never risk more than 2% of your account per trade. so you must know what that is in pips before you start trading that session. so if you have $1000 account and 2% is $20, then if you keep a 20 pip stop, you can trade 1 mini for 20 pip stop. so you know if you are down 20 it is time to stop trading.

Hope this helps..

...good trades,
Sam

Thanks a lot guys. Appreciated.

Sam, I totally agree with your view about psychology and risk management aspect. I also believe doing the job well will take care the money parts of any professional work.

Somehow, I think I couldn't put the question clearly. What I was trying to ask is the actual pip count in relation to price quotes.

For example, say I bought a currency at 1.2360 and sold it at 1.2370. How many pip I'd have made? For the simplicity no need to take into account the slippage.

I'm thinking it would be 10 pips with consideration of pip value of 0.0001 ? As I'm a newbie, just want to make sure if this is the case.

--------Edit
I just have seen the answer on BabyPips website. Yes, it'd be 10 pips. Once again thank you for taking time to answer.