How to Calculate Pip Values
A "pip" is the smallest increment in any currency pair. In EURUSD, a movement from .8941 to .8942 is one pip, so a pip is .0001. In USDJPY, a movement from 130.45 to 130.46 is one pip, so a pip is .01. How much in dollars is this movement worth, for example, per 10,000 Euros in EURUSD? How much is one pip worth per 10,000 Dollars in USDJPY? We will refer to the size, in this case 10,000 units of the base currency, as the "Notional Amount". The formula for calculating a pip value is therefore:
(one pip, with proper decimal placement/currency exchange rate) x (Notional Amount)
Using USDJPY as an example, this yields:
(.01/130.46) x USD10,000 = $0.77
or 77 cents per pip
Using EURUSD as an example, we have:
(.0001/.8942) x EUR10,000 = EUR 1.1183
But we want the pip value in USD, so we then must multiply EUR1.1183 x (EURUSD exchange rate):
EUR 1.1183 x .8942 = $1.00
This is in fact a phenomenon you will see with any currency in which the currency is quoted first (such as EURUSD, GBPUSP, or AUDUSD): the pip value is always $1.00 per 10,000 currency units. This is why pip (or "tick") values in currency futures, where the currency is quoted first, are always fixed.
Approximate pip values for the major currencies are as follows, per 10,000 units of the base currency:
USD/JPY: 1 pip = $.77; In other words a change from 130.45 to 130.46 is worth about $.77 per $10,000.
EUR/USD: 1 pip = $1.00; .8941 to .8942 is worth $1.00 per 10,000 Euros.
GBP/USD: 1 pip = $1.00; 1.4765 to 1.4766 is worth $1.00 per 10,000 Pounds.
USD/CHF: 1 pip = $.59; 1.6855 to 1.6866 is worth $.59 per $10,000.
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We also welcome forex news traders, and do our best to provide instant fills without ever widening the spread. Processing trades during especially busy news times is always a challenge, so we promise you this; if we accept your trade during peak times, it will be at our usual spread…always. And with our new Exit Order Promise, we give you the assurance that your exit orders will be honoured no matter what the market conditions are.
Pip Forex is owned by Simray Holdings LLC, a company regulated by Norwegian law.
Do of course let us know what you think about Pip Forex. We're doing something different, and like to hear your comments - good or otherwise!
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Read the above line as many times as you need to because that is your path to making a killing trading the forex market!
Learn Forex! Useful Readings on FX Trading There's no quick way in learning Forex trading. You gotta read and read and read to get things started. Fortunately, we're here to help.
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Advantages in Forex trading
Reading and undestanding Forex quotes
Leveraging your money in Forex margin trades
Currencies traded in Forex market
Managing risks: The fundamental analysis
Managing risks: The technical analysis
Getting started in Forex trading
Advantages in Forex trading
Reading and undestanding Forex quotes
Leveraging your money in Forex margin trades
Currencies traded in Forex market
Managing risks: The fundamental analysis
Managing risks: The technical analysis
Getting started in Forex trading
List of online Forex Brokers
With the recent booms of high speed Internet, much of the trading work in Forex are now done online. As the result, online Forex brokers mushroomed all over the Internet.
Getting a FX broker online is easy, but what's tough is to get someone who's reliable and yet, cheap. Here're some of the reputable Forex brokers:
Easy Forex (Recommended)
Forex Yard
Forex Pro
Forex Webtraders
With the recent booms of high speed Internet, much of the trading work in Forex are now done online. As the result, online Forex brokers mushroomed all over the Internet.
Getting a FX broker online is easy, but what's tough is to get someone who's reliable and yet, cheap. Here're some of the reputable Forex brokers:
Easy Forex (Recommended)
Forex Yard
Forex Pro
Forex Webtraders
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One of the amazing characteristics of Pip Forex is that it let's you trade when ever you have time. Since the forex market is a 24 hour market, you have the luxury to decide exactly when it is best for you to put Pip Forex to work