Problem with Pips Value calc: How to earn $0,1/pip?

[Lucke]

I’m a conservative person and like to earn $0,1/pip. I will invest $500 using a broker’s MT4 and my exit target will be 20pips profit.

So what is the Volume level I must put (using a MT4 platform) in order to have $0,1/pip? So that if I earn 20pips, I get $2 (20pips x $0,1).

Explain your calculation in the same time!

Thnx!

[rhodytrader]

What pair(s) are you trading?

[Lucke]

What pair(s) are you trading?

Sorry I forgot to precise the pair. I trade GBP/USD.

[rhodytrader]

For GBP/USD (and the other non-USD base pairs) a pip is 1/10,000th of a point. Mutiply that through by the trade size and you get the pip value of your position.

100,000 * 1/10000 = $10

Or to find the size for the pip value you want divide the value by 1/10,000:

$0.10 / (1/10000) = 1000

[Lucke]

Thnx rhodytrader. Yes I understand this but I want to verify in the practice.

Should I have to put 10% (0.10) with a $500 deposit in my pending order in order to get $0,1/pip? Is that correct?

[rhodytrader]

Your margin deposit depends on your account's leverage setting.

Let's assume it's 100:1 and that GBP/USD is 2.00. In that case your 1000 GBP position would require $20 in margin.

1000 x 2.00 x 0.01 = 20

Keep in mind that the margin requirement is based on the value of the position now the size of the trade.

[Lucke]

OK! Thnx rhodytrader for your time and patience. It's clearer like that!