hi, I am going through the lessons and have a question on lesson 21, what is a lot in forex. For the calculations where USD is not quoted first, we are dividing by the quote prices then multiplying them later,
(.0001 / 1.1930) X 100,000 = 8.38 X 1.1930 = around $10 per pip
Does this mean that except for JPY, regardless of the exchange rate, 1pip will always change the value by $10 for 100,000 units?
Hello Ocean18,
Please note that the pip value is fixed and doesn’t change, and the result is in the quoted currency of the currency pair. For example if you have a USD account, the fixed pip amount is:
• $10 for a standard lot which is 100,000 worth of currency.
• $1 for a mini lot which is 10,000 worth of currency.
• $0.10 for a micro lot is 1,000 worth of currency.
But in the cases where the base currency of your trading account is different than the quoted currency, you should always convert the result.
The exception we could make is with the JPY, where the value per pip is 1000, as there 3 decimals after the coma.
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