Hello how much is a pip if i have 1000$ acount and how much if i have 100 $ account.With levrage and without.And can making 100 pips a month double the size of youre 1000$ account?
Thank you
What have you been doing for the 2 years since you became a member here?
Im gonna let someone with better writing skills than me answer this. But I did see a commercial last night for hersey bars and it said the smallest square is called a pip.
A pip is an increment of change in the exchange rate between two currencies (just like a penny). In EUR/USD one pip is 1 one hundredth of a penny. So if EUR/USD goes up from 1.08 to 1.09, it goes up by 100 pips.
If you bought EUR/USD at 1.08 and sold it at 1.09 your profits would depend on how many units you bought. If you bought 1 unit (a single euro) your profit would be one penny. If you bought 2 units (two euros) your profit would be two pennies. If you bought 1,000 units (a microlot, a thousand euros) your profit would be a thousand pennies (which is $10.00 of course). If you bought 10,000 units (a minilot, ten thousand euros) your profit would be ten thousand pennies (which is $100.00 of course).
A pip, like I said is 1/100th of a penny. So if EUR/USD went from 1.0800 to 1.08001, it would have gone up 1 pip. If you bought it at 1.0800 and sold it at 1.08001, your profits would also depend on how many units you bought just like above. If you bought 1 unit (a single euro) your profit would be one one hundredth of a penny. If you bought 2 units (two euros) your profit would be two one hundredths of a penny. If you bought 100 units (100 euros) your profit would be a hundred hundredths of a penny (which is one penny of course). If you bought 1,000 units (a microlot, a thousand euros) your profit would be a thousand one hundredths of a penny (which is ten cents of course). If you bought 10,000 units (a minilot, ten thousand euros) your profit would be ten thousand one hundredths of a penny (which is $1.00 of course).
If your account is $1,000 you have the capital to trade 1,000 units (one microlot) of EUR/USD using a little leverage (1,000 units times 1.08 is $1080). With that position size, every pip you win or lose would win or lose you 10 cents (0.0001 times 1000 = 0.10). Your broker will likely allow you to trade a lot more than that, probably 46 microlots or so (46,000 units). But if you do that your position size will cause you to win or lose $4.60 per pip and that would mean that if you won about 218 pips you would double your account and if you lost 218 pips your account would close with a ZERO balance (1000/4.6=218).
My suggestion? If you have a 1,000 account do not trade more than 1 microlot no matter what your stop loss distance is and if you can trade with a broker that allows you to buy odd lots then trade positions of 100 units or so. 100 unit positions would set your risk/reward per pip at a penny in pairs with your account currency as the counter. If you end up losing 10,000 pips over the course of time or in some freak illiquid minute, you will still have 90% your trading capital intact.
-Adrian