Hi all
I have read the pip school entry about pips and pipettes 5 times now and I’m confused,
I am trading on demo and I just can’t work out the whole pip concept so much so that I’ve just begun to focus on the profit entry on mt4 screen and then close when its up!!
Please can someone help me before I lose my mind!!!
a dollar is a dollar.
a dollar has 100 cents, or pennies
a penny has 100 pips. PIP = Percentage In Point
same for euro.
a euro is a euro
a euro has 100 cents (same idea as dollar)
a eurocent has 100 pips
a yen is a yen, but ONE yen is only worth around a penny (US), so it takes 100 Yen to be at around the level of a dollar
so one yen has 100 pips
1 pip = 10 pipettes.
Non-JPY pairs:
1 pip = 0.0001
1 pipette = 0.00001
JPY Pairs:
1 pip = 0.01
1 pipette = 0.001
[B]guvvy, [/B]
These three guys ([B]daydreamer65, SoundOfLight,[/B] and [B]ClarkFX[/B]) have given you everything you need to know.
After you have read what they posted, if you’re still confused, go back and read those 3 posts again — but, read them in the reverse order, that is, ClarkFX first, SoundOfLight second, etc. Here’s why: What Clark posted is more basic than what SoundOfLight posted, and what SoundOfLight posted is more basic than what daydreamer65 posted.
When you completely understand what Clark and SoundOfLight have posted, then you’ll be prepared to master the info that daydreamer65 posted.
It’s all there. Study it, until it has become part of your brain.
Maybe there should be an advanced course all on pips and pipettes. 
In simple words:
For example for US dollar:
100 cents make 1 dollar.
100 pips make 1 cents
so 100 x 100 =10000 pips make 1 dollar.
and,
10 pipettes make 1 pip so
10000 x 10 = 100000 pipettes make 1 dollar.
thank you.
I am sorry if I asked a stupid question.
I think I am getting it now.
So for EUR/AUD/USD/GBP, 1 pip is 0.0001 penny cent etc. so 10000 pips make the 1 pound, 1 dollar etc so a 100 pip move would only mean a 0.02 cent penny profit etc.
So a 1 volume order on MT4 means a 1 gbp 1 USD order?
The only stupid question is the one not asked.
It depends on the leverage you trade with. It sounds like you make this harder on yourself then it needs to be. Does your broker offer four or five digit price feeds?
On a four digit price feed a pip is the smallest increment the price will move (the fourth number after the decimal), on a five digit price feed a pipette is the smallest price movement (the fifth digit after the decimal).
The increase/decrease in your equity by each pip/pipette depends on how many lots you have and at what leverage you trade.
making things harder than they need to be is the story of my life!
E.g. this am I longed AUD/USD at 1.02268 and closed at 1.02656. so this is about a 400 pip profit??
now the volume is at 1 and the profit showed 368.00.
so say IF in real time, my account equity was 3000 USD and I only went 1% of my account so
300 x 0.0001= 0.03
0.03 / 1.02656=0.0292= 17dollar profit
is that correct?!
then 0.0292 X 600 (as this is the increase in pips)=
sorry not 600 but 400!!?
sorry again!!
it is 38 pips!!
so for 38 pips I made 17 dollars!
If the profit showed $368 then that is your profit and not $17. I think your math is a bit off or confusing at least. 1% of 3,000 is 30 and I am not sure where you are going with that to be honest. When you say volume is 1 I assume you mean 1 lot. As a newbie I would not recommend that you trade that size in your live account. Start with 0.01 lots in a micro-account. Do not use too much leverage. I think you worry too much about each pip. Having said that, 38 pips on a trade is not bad at all but it comes down to your trading style.
Thank you.
I agree with not being too concerned about each pip.
I did just used to focus on the profit figure but someone mentioned I should be more concerned with the pips??!?!
Yes, I mean 1 lot but what does that mean in real terms? MT4 doesn’t really let me trade a specific amount per trade?
When calculating USD pairs where the dollar is the quoted currency ie the second currency in the pair,
then the calculation is always in dollars, there is no math involved.
So volume 1 = 1 lot of 100 000 units of USD = $100 000.
Also when trading 100 000 units of USD you are trading at $10/pip.
Forget for the moment your position because you have moved ahead too quickly.
But as a hint you need to trade at 1 000 units level, 10 cents/pip (0.01 volume)
So go to your platform & key in volume 0.01 on AUD/USD, & take the trade, remembering the spread,
the figures should move in 10 cent increments.
I think I have cracked it.
0.0001 is a pip.
so 0.0001 is a penny/cent etc
i.e 0.001 is ten cents
0.01 is 1 dollar
0.1 is 10 dollars
1 lot is 100 dollars?
which is why it is better as a newbie to trade micro or mini lots because that would mean trading 1 dollar or 10 dollars.
have i cracked it?!
The 1st bit is correct, 0.0001 = 1 pip
but 1 pip can equal anything, it is dependant upon lot size & quote currency (second currency in the pair)
When you trade USD as your quote currency, volume 1 = 1 lot = $10
As a newbie you need to trade 1 cent/pip, 10cents at the most.
Thank you very much.
Ok so if USD is quote currency then 1=$10.
As a newbie I should trade at 0.01 which is 1 cent or 0.1 which is 10 cents?
Would I be sensible in thinking that I am running before I walk?!
maybe I should focus on method then worry about profit etc?
Getting acclimatised to your platform is one of the 1st priorities, so that you
do not overtrade your account. Just keep it at 0.01 volume at the moment, just
taking trades & seeing how much money you win or lose.
It is then best to concentrate on loss, how much you can lose/trade.