Forex-Calculating risk/pips per point

[cr6196]

Right having a wee problem calculating my targets, i.e how much i will lose if my stop loss/take profit gets hit.......

right so here was my calculation----

SOLD GBP/USD @ 1.3911

S/L---- 1.3930---19 pips
T/P----1.3823---88 pips
SIZE---- 0.7 so through my equations it went and.....

$5.03 pp so...

$95.97 potential loss
$442.64 potential profit

I got stopped, and actual loss was $133.00...yeah so i wasnt even close...
i am using mt4 demo if that makes any difference...i really dont know what i have done but it kept coming out wrong. Anyway laptop running out of battery so any help would be appreicated.

cheers
calum

 

[1Pipped]

Its $7 per pip at 0.7 - not $5.03 thats where the problem is.
19 x $7 = $133.00
88 x $7 = $616.00

 

[cr6196]

fo shizz, is reli that simple...i was doing summat reii reli different, so is it the same for every currency pair?

 

[1Pipped]

GBP/USD
Base/Quote

Its the same for the pairs where the Quote currency is USD

You have to do a bit of fiddling to get the $ per pip value for say USD/JPY.

 

[cr6196]

yep, just worked that out lol, was looking at eur/jpy, was only out at dollar or so...and about two for usd/jpy...what fiddling wud be nesscessary?

cheers for that btw, still cant believe it was that simple, i had been doin it the other way for ages and then switched to oanda so it didnt matter, lol.

 

[DannyO]

calculating profit and loss

fo shizz, is reli that simple...i was doing summat reii reli different, so is it the same for every currency pair?

size of position x number of pips as in 00.50 is 50 pips. So if trading a position of 1000 on eur/usd , profit or loss is determined by whether you were long or short on the move.
IF you were short say on eur/usd at 1.3823 and it went to 1.3729 for example
3823 -3729 = 94 pips profit. IF you were long than you are 94 pips down. What that equates to in money is now determined by the position size. so if the position size was 1000 than 1000 x .0094 = $9.40 another way of looking at that is that you were trading at 10 cents a pip when you are trading 1000 units. The second currency in the pair is the currency that your profit and loss is calculated in. Remember that if the Secondary currency is the Japanese yen then it is only 2 decimal points. If the secondary currency is not the usd you have to calculate again to get it back into USD so use the closing rate of the trade for the secondary currency as in usd/chf or yen or whatever. Becuase I tend to stay on the Eur/Usd I tend to forget about all the transfer back into USD stuff as I dont need to do that one.

Dan O A

 

[1Pipped]

What I do is work out what a pip is in the quote currency for the trade size, eg 0.7 lot of e/j:

EUR/JPY 1 pip = 0.01 x 70,000 = ¥700

Then convert the ¥ to my account currency which is £ using the GBP/JPY rate.

¥700 / 137.ish = £whatever_per_pip

Pretty much what DannyO said, still does my head in sometimes though !!