Hi,
here
is this
Let’s assume we will be using a 100,000 unit (standard) lot size. We will now recalculate some examples to see how it affects the pip value.
USD/JPY at an exchange rate of 119.80(.01 / 119.80) x 100,000 = $8.34 per pip
I read it this way
119.80 * 0.01 / 119.80 * 100000
and get different result
Tell me please
where is my fault?
Hello andru. Welcome to this forum.
The way that formula is presented in the School lesson is very misleading.
Here is the part of that lesson that we’re talking about:
Those formulas are badly presented.
To be mathematically correct, [B]they should read:[/B]
USD/JPY, at an exchange rate of 119.80,
Pip value = (.01 / 119.80) x 100,000 = $8.34 per pip
USD/CHF, at an exchange rate of 1.4555,
Pip value = (.0001 / 1.4555) x 100,000 = $6.87 per pip
In cases where the U.S. dollar is not quoted first, the formula is slightly different.
EUR/USD, at an exchange rate of 1.1930,
Pip value = (.0001 / 1.1930) X 100,000 = €8.38
€8.38 x 1.1930 = $9.99734 rounded up will be $10 per pip
GBP/USD, at an exchange rate or 1.8040,
Pip value = (.0001 / 1.8040) x 100,000 = £5.54
£5.54 x 1.8040 = 9.99416 rounded up will be $10 per pip.
.
Thank you, Clint, very much.
Now understand.