Hello,
I try to understand what 1 PIP movement is worth with the position you are in at the moment.
I have put down 3 scenarios which I think should cover all scenarios below. I think I understand the 2 first scenarios but don’t understand how the 3:rd scenario is calculated?
I have used the pip calculator:
Pip Calculator: Free Online Forex Pips Calculation Tool for Traders
Are my explanations correct for the first 2 scenarios and how is the 3:rd scenario calculated?
[B]Scenario 1:[/B]
As USD is the counter currency, we can always count $0.1/1000 Units per pip regardless of Ask Price?
EUR/USD
Position: 100,000 Units
Ask Price: 1.6
Account Currency: USD
Pip Value: $10
[B]Scenario 2:[/B]
As USD is the base currency, we calculate as:
(100,000 / 1.2) / 10000 = 8.3333
USD/CAD
Position: 100,000 Units
Ask Price: 1.2
Account Currency: USD
Pip Value: $8.3333
[B]Scenario 3:[/B]
Both base and counter currency are different than Account Currency.
How is this calculation made?
CHF/JPY
Position: 100,000 Units
Ask Price: 1.4
Account Currency: USD
Price for USD/JPY: 124.1619
Pip Value: $8.054