This might seam like a dumb question.
How do we find the pip value on the exotic currencies. Everyone keeps saying the the JPY is on the second number after the dot, this I know very well.
What about the pip value on ZAR, BRL, NOK, SEK, DKK, MCN, CNY?
Is there a table or somewhere where I can read the exact pip value for these currencies?
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Its not a dumb question, its a confusing issue and has led many traders to make mistakes with positions and stop-losses 10 times too big or 10 times too small.
But are you sure its a good idea to even trade exotics? - they tend to be expensive, with wide spreads and unpredictable moves. Have you found they have any great advantages over the majors.
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I am testing an algo and it has had many good results. This algo will only allow me to trade forex.
I have done my research and it only confirms what I have long imagined. There is a lot of value in trading exotics. The spreads are not as wide as people make out to be.
The volatility in many cases is much higher than the usual pairs. EURUSD normally moves around 46 pips per day. USDZAR moves around 100 pips per day. All others are almost the same.
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Pip totals are not a great way to compare the opportunities of different markets. Neither are spreads. Look at the spreads as percentages of the respective bid prices and you’ll find USD/ZAR is many times more expensive to trade than EUR/USD. Margin requirements would be likewise much more expensive for the exotic pair.
That said, this is an area I’ve personally never been able to make pay consistently so if you’re going to go ahead it would be more than good to see some positive results. Good luck.
Thanks. I still believe that if you have a profitable set up it’s possible to make good profit, I don’t recommend trading them all the time but from time to time there are many great opportunities to make money on those currencies.
It costs a lot more to short companies stocks but people do it all the time, and the reason is the same as exotic currencies. Price movement.
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Most traders ignore exotic currencies because of the the high risk involved but if you are going for exotic pairs then I would urge you to keep your trading size small as an exotic pair can make a huge unpredictable move.
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That’s why most traders lose money. The key is not to do what most traders do. The ATR indicator is an extremely valuable tool when comes to trading highly volatile currencies.
If used well it can be very profitable to trade them.
I listen to podcasts all the time and all the pro traders speke about it the same way.
I am also interested in exotic pairs but the currencies pip values confuse me. Did you find out what they are especially for ZAR.
Yes, I’ve got a position size calculator installed on the MT4, I use it to calculate my position sizes on any forex pairs, it also works with commodities and indices.
Volatility matters…