Whats a Pip Range?
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  1. #1
    Lorenzo is offline Newbie
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    Default Whats a Pip Range?

    Hi

    Im doing the school lessons but dont know what a pip range is.

    E.G. It say: Below is a chart of average pip range for the major pairs for each day of the week:


    But nothing has explained what pip ranges are.


    Thanks in advance.
    Last edited by Lorenzo; 01-18-2011 at 02:24 PM.

  2. #2
    Sweet Pip's Avatar
    Sweet Pip is offline FX-Men Honorary Member
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    Quote Originally Posted by Lorenzo View Post
    Hi

    Im doing the school lessons but dont know what a pip range is.

    E.G. It say: Below is a chart of average pip range for the major pairs for each day of the week:


    But nothing has explained what pip ranges are.


    Thanks in advance.
    Hi Lorenzo,
    Where in the school is that? Off the top of my head I'd say it refers to the number of pips between a high and low price. The high & low could be the daily high and low, or the weekly, monthly or a swing or session, and the space between those highs & lows is called the range, and is measured by the number of pips.

    It sounds like in that example it's calculating the average number of pips price moves on a daily basis. It could be used to determine whether price has travelled it's average yet or not when considering to enter a trade....if it's average daily range is 100 pips and it's already moved 100 pips today, then it's much riskier to put a trade on in a continuation direction than it is to expect a bit of a reversal (pullback) first.

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  3. #3
    navidkh is offline Newbie
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    Quote Originally Posted by Sweet Pip View Post
    Hi Lorenzo,
    Where in the school is that? Off the top of my head I'd say it refers to the number of pips between a high and low price. The high & low could be the daily high and low, or the weekly, monthly or a swing or session, and the space between those highs & lows is called the range, and is measured by the number of pips.

    It sounds like in that example it's calculating the average number of pips price moves on a daily basis. It could be used to determine whether price has travelled it's average yet or not when considering to enter a trade....if it's average daily range is 100 pips and it's already moved 100 pips today, then it's much riskier to put a trade on in a continuation direction than it is to expect a bit of a reversal (pullback) first.

    hi.
    i see this quote in pre school>trading sessions.

    "Let's take a look at the average pip movement of the major currency pairs during each trading session."


    so you mean that if the average pip movement for EUR/USD in london is 114, and its already moved up in price 114 pips today, we expect a bit of a reversal in its price for today? and we shouldn't make this bid?

  4. #4
    zoya is offline Newbie
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    so the smaller the pip range, the safer it is to trade?

  5. #5
    JohnLeonard is offline Master Contributor and Member
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    Quote Originally Posted by zoya View Post
    so the smaller the pip range, the safer it is to trade?
    No. The smaller the pip range the less price will typically move during that period. If the average daily pip range is 50 pips then, on average, price will move approximately 50 pips that day. If the average daily pip range is 100 then, on average, price moves 100 pips a day.

    What Sweet Pip was saying is that if the daily movement of price, on average, is 100 pips and price has already moved 100 pips that day, the likelihood of it moving further has diminished. If the average daily pip move is 100 and price has already moved 150 then the chances of it moving further are diminished even more.

    The same is true of smaller pip ranges. If the average daily pip move is 50 and price has already moved 50 pips for the day, you shouldn't expect a great deal of additional movement. If the price has already moved 150 pips that day, then price has moved well beyond what it typical.

    Keep in mind that these are averages of moves. Price that moves 50 pips one day followed by 150 pips the next has an average daily pips move (using a two day average) of 200/2=100.

    ,

  6. #6
    utuxia is offline Newbie
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    Just to clarify, if a pip range is 100 for the day, is that movement in both directions or just one direction. For example it goes up 50 and then down 50 is that it for the day on average, or you saying it could go up 50, down 50, up 50, up 50 again and that would be it for the day. I assume it means you should expect a reversal if the average pip is already reached.

  7. #7
    TheLastBear's Avatar
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    Quote Originally Posted by zoya View Post
    so the smaller the pip range, the safer it is to trade?
    No, it does not work like that. 'Safety' in trading is dependent on your strategy and execution of it. The bigger the pip movements are the more volatility you have and the more opportunities will arise which will increase your ability to profit/lose from your trades.
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  8. #8
    TheLastBear's Avatar
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    Quote Originally Posted by utuxia View Post
    Just to clarify, if a pip range is 100 for the day, is that movement in both directions or just one direction. For example it goes up 50 and then down 50 is that it for the day on average, or you saying it could go up 50, down 50, up 50, up 50 again and that would be it for the day. I assume it means you should expect a reversal if the average pip is already reached.
    On a daily chart it would be the range from its intra-day low to its intra-day high and you should not necessarily expect a reversal just because the average was reached. Its a dynamic market which does not trade based on daily pip averages.
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