Confused about calculating profit of my first order?

Beginner Questions
1

In the last weeks i managed to read through the school articles. This morning (CET) i started up metatrader 4 and started looking for candlestick patterns and test with the common indicators.

This evening i watched a video how to place order and change them to add stop and target orders. After a few minutes i saw a down trend (m1 and m5) and i made my first order. (demo account )

After a few minutes i closed the order to see what the result would be, i viewed the detailed report:
eur/usd pair
sell 0.01 (1000 units, micro lot)
price: 1.39235
price 2: 1.39196
profit: 0.04 (USD)

When i used the pip calculator ( forex-calculators/pipvalue.php ) and enter 1000 as position size and 1.39235 as price, i would get 0.1 as pip value.

But looking at my prices i would get:
1.39196-1.39235 = 39 pips

Shouldn’t the profit of my first order be: 39*0.1=3.9 ? I suspect i’m missing something big here :wink: . Can somebody offer me a helping hand?

2

It’s 3.9 PIPS you have, not 39.

3

If you traded 1 Micro lot then your profit should have been .39

4

You are sort of right. Pips were defined when the industry standard was 4 decimal digits (2 for JPY pairs) for prices. That became entrenched and when the industry went to 5 digits, it continued so as not to confuse the old traders. But I can understand how new traders would be confused.

Calculations using the 5th decimal place are called pipettes. So you need to remember that pips use the difference in the 4th digit. Your trade had a profit of 4 pips (some say 3.9) or 39 pipettes.

5

Thank you for the explanation, i appeciate it.

I was already thinking: what a busy market a few pips per second :slight_smile: