I don’t understand how I made $25.92 USD on this trade (see below). The difference between the open and close of my position is .00229
Trading View: Close short position for symbol OANDA:USDCHF at price 0.88344 for 10000 units. Position AVG Price was 0.885730, currency: CHF, rate: 1.131939, point value: 1.000000
So is that 22.9 pips? Oh! The formula is multiply number of pips by the “rate” 22.9 x 1.131939 = $25.92
It’s hard for me to convert .00229.
Is there a good tool out there to use for this conversion?
0.00229 : apart from with Yen pairs, the “single pip” is the fourth decimal place. The fifth decimal place is “pipettes” (tenths of a pip). So from 0.88344 to 0.88573 is 22.9 pips. And as you correctly worked out, if you multiply that by the pip value (in this case about 1.132) it gives you the amount of money.
It’s easiest when the quote currency is the US dollar, as with GBP/USD or EUR/USD or AUD/USD, because then the pip value is always $10 (regardless of leverage).
With Yen pairs, the “single pip unit” is the second decimal place, not the fourth.
As you discovered, a combination of brain + calculator works great!
But doesn’t your trading platform display all this automatically, for you?
Thanks for that pointer about Base/USD pairs. Um, I’m bouncing around platforms. There’s also a lot of features. What FOREX tools do you use/recommend?
IMO the only really important thing is to avoid MetaTrader4 at all cost.
Personally I recommend C-Trader (clear first choice) or Trading View (good second choice) or failing those even MetaTrader5 (poor third choice) but all of this is less important to your chances of success.
The confusion described should not have happened but it is entirely understandbable when the brokerage industry consciously conspires to introduce an artifical device called a “unit”, which has no reality but which is designed to make clients think they are buying an asset in forex rather than placing a bet.
Exactly - I’m always wondering, reading forums, what proportion of people “trading” forex imagine that currencies are actually changing hands whenever they “trade”.
Their brokers want them to think that, don’t they?
Babypips learning is really good about making it clear that you are betting on the price direction of a pair… and betting against your broker NOT in the market per se.
Yes. I am not in this to fiddle with software. Seeing that people chart with TV and then trade with MT was a red flag. Here’s a shift: What’s one topic, practice, concept you’d suggest I peek at? (While I toil away memorizing candlestick shapes and patterns.)
I suggest “1-2-3 formations”. Maybe worth looking around online for PDF’s about it (but NOT the one by someone called ‘Trader Vic’ or Victor Sperandeo which is really awful and unhelpful and mistaken in places. Any others, though!).
What was the volume (the lot size) you opened the trade with? also for a good tool, search for forex profit calculator, I am not sure if you can find a free tool but give it a try
Many people have never read it, I think, and imagine that they’re actually “trading” when they bet on CDF price movements. Some even try to use market-related parameters (like volume), not appreciating that there isn’t a “market” and that the so-called volume relates only to that of their own “broker’s” other customers. And some brokers are happy to fool them about that, too.
