Hi, I am puzzled by this:
My broker offers
USTECH in two ways: USTECH cash and/or .USTECH index.
The bid price for both are the same.
What is better to trade? Why do they offer it in two different ways?
why don’t you ask the broker first ? get onto the online chat and ask them, they are the most qualified to CLARIFY specifically what their products are.
now, when you have that information, come here and ask us what we think , as to whether it’s honest or not, or is it a standard product.
that’s my advice
i live by this rule in forex
ASK YOUR BROKER EVERYTHING YOU DON’T UNDERSTAND
but
NEVER TRUST YOUR BROKER
and
RESEARCH EVERYTHING BEFORE YOU PUT MONEY DOWN
1 Like
Thank you Martin, I agree. I do check with them occasionally, but don't always get clear answers, Here is one example: Left me more confused as to what the correct answer was and if she was wrong. Take a look to see what I mean:
Vanessa
01:36:56 Welcome. How can I help You?
clem
01:37:31 Hi, I am a bit confused about a trade I put on and the pip value.
clem
01:38:45 The trade is USTech index. How many pips are there between the values 6386.70 and 6281.44?
Vanessa
01:39:27 26 pips clem
Vanessa
01:39:31 2.6
clem
01:40:26 ok, but when I drag the line from the first value to the second on the MT4 platform, it says 10526 pips. Why is that?
clem
01:41:05 why do you say 26 pips and then 2,6?
Vanessa
01:43:02 thats only 2.6 pips Clem
clem
01:44:05 can you explain how you arrive at that 2.6 pips number?
Vanessa
01:44:32 in pips
Vanessa
01:44:41 and the current spreads
clem
01:46:19 as i wrote above, the line when dragged shows 10526 pips. why?
Vanessa
01:47:10 please check on the last two digit , 26
Vanessa
01:47:35 the fourth digit is a pip,the last one 6 is pippette since it is the 5th digit
Vanessa
01:47:45 so it's 2.6 pips.
clem
01:50:04 what about the first four digits, 6386 and 6281
Vanessa
01:51:32 you would deduct only the last two digits.
clem
01:52:51 so, if i wanted a 100 pips difference starting from 6386.70 going below it, what number would i get?
Vanessa
01:55:56 your trying to make a Pending order?
Vanessa
01:56:37 Please check on the prices first ,when you click New Order and choose Pending order
clem
01:57:04 no, say the first number is an entry long but the second is a Sl number having/losing 100 pips
clem
02:01:07 so, where should the SL be sert at?
clem
02:01:22 set at
Vanessa
02:07:25 Here you can check as an example http://www.noafx.com/4_7-stop-loss-take-profit-levels.php
Vanessa
02:07:51 I cannot provide an exact number as to where you will be setting your SL.
clem
02:08:48 Ok, thanks. What about my question: "but when I drag the line from the first value to the second on the MT4 platform, it says 10526 pips. Why is that?"
Vanessa
02:10:04 from which price?
clem
02:12:13 from 6386.70 to 6281.44?
clem
02:13:10 Final question:
clem
02:14:00 If my entry is at 6386,7 and I want to take a SL of 100 pips below that, what number will it be?
clem
02:15:23 Where can I get a good explanation of pips and how to calculate those?
clem
02:15:37 any links please?
Vanessa
02:18:23 here https://www.babypips.com/learn/forex/pips-and-pipettes
clem
02:20:09 Ok, will do. But, If my entry is at 6386,7 and I want to take a SL of 100 pips below that, what number will it be?
Vanessa
02:23:24 You can just put a trailing stop and set it to 100 points and so it will automatically set its stop loss
Vanessa
02:23:28 at its price
Vanessa
02:23:46 Thsi number 10526 is actually the price to where you set
clem
02:26:06 The starting number is say 6386.7 What price will be 100 pips below that? Surely, can't be 10526 as you wrote, is it?
Vanessa
02:28:25 no it isnt
Vanessa
02:29:46 you can try 6286.1 price , or I would suggest to use a trailing stop and set it to 100 points
clem
02:31:33 ok, i don't understand pips well. is it same as 'points' as you mention?
Vanessa
02:33:16 the pip is the 4th digit
Vanessa
02:33:27 it would be better to check the links I provided to you
clem
02:33:46 is points different from pips?
Vanessa
02:34:10 its pippettes or points ,its the 5th digit
clem
02:42:41 So, how many pips are there between 6386.70 and 6281.44? Is it 10526 or 1053 or 105 or just 26 or 2.6? Which one is officially correct? but why does the drag line on Mt4 shows it as 10526 PIPS?
Vanessa
02:43:50 2.6 as I have said
Vanessa
02:44:00 10526 is the price
Vanessa
02:44:25 the difference between the BID and the ASK is the spread, the smallest movement of each price is the Pip
Vanessa
02:44:47 so if you set the price to 10526 tom 10527 ,thats 1 pip
clem
02:46:13 I get that but the two prices are 62865.70 and 6281.44, not 10526
Vanessa
02:46:32 because you drag to that price
Vanessa
02:46:36 you drag it
Vanessa
02:46:44 if you did not drag then the price wont change
Vanessa
02:46:57 that means that is the price you set either your SL or TP
clem
02:48:02 no, no, i was only dragging it from 1st price to second price when it shhowed 10526 pips
clem
02:51:57 In the two numbers 6386.70 and 6281.44, the first nyumber is in the three hundreds and the second is in the two hundreds, how can the pips be only 2.6 as you wrote? I don't get that
Vanessa
03:03:38 so in this website explains what pip is and how to count pips https://www.babypips.com/learn/forex/pips-and-pipettes
clem
03:04:12 ok, thanks and bye
Vanessa
03:04:24 you're welcome"
Thanks for your help and comment, Martin. Much appreciated.
ok, let me make a cup of coffee and have a read through this and i’ll give you my opinion… ok . STAND BY
Hi mate hehe
ok, i see the problem
-
When talking to your broker MAKE THE BEST USE OF CHAT SESSIONS… hence DEFINE YOUR QUESTION (in this session you are just going in circles and not being clear and she’s confused, she actually did answer your question pretty early.
-
I don’t think you understand what a PIP is (so i’ll explain it to you)
-
i don’t think you understand what SPREAD is (so i’ll explain it to you)
-
it’s a good idea when chatting to your broker to ALWAYS get a chat transcript, FOR 2 REASONS
first as a record just in case any bullshit happens
secondly so you don’t have to ask the same question twice (Save your chats in a folder and label them accordingly, savess a lot of time) -
you have not told me who your broker is, if you tell me your broker name i can do a chat and ask them what is the difference between the 2 US Tech’s
LET’S DISCUS SPIPS FIRST
Here is what was said in the chat
01:38:45 The trade is USTech index. How many pips are there between the values 6386.70 and 6281.44?
01:39:27 26 pips
SHE ANSWERED YOUR QUESTION
the answer is 26 Pips
LET’S WORK IT OUT… ok
6386.70
and
6281.44
so… ignore everything before the decimal point
so we are left with 70 and 44
now 70 - 44 = 26
so if we round thngs off to make it simple
we could say this
if the price was
1000.00
and the price went up by 1 pip
the price would then be 1000.01 does that make sense
Original price 1 Pip 10 pips 100 pips 1000 pips 10,000 pps
1000.00 1000.01 1000.10 1001.00 1010.00 1100.00
does that make sense ?
so now this question
If my entry is at 6386,7 and I want to take a SL of 100 pips below that, what number will it be?
IF YOU ARE BUYING
AND YOU ENTER AT 6386.70
S/L 100 PIPS LOWER = 6386.70 - 1.00 = 6385.70
and as for this question
, but when I drag the line from the first value to the second on the MT4 platform, it says 10526 pips. Why is that?
i have no idea what your talking about
if i was to guess i might say that you are confused as to what the crosshair is saying
in this image we can see the crosshair saying 11 / 898 / 1449.7
the 1449.7 is the price at this point where the crosshair is (The Horizontal Axis)
11 is the Number of candles from where the crosshair started to where it finishes
898 means 898 POINTS
POINT ARE NOT PIPS
POINTS ARE PIPPETTE’s
89.8 PIPS = 898 POINTS
now LET’S DISCUSS SPREAD
if i buy an apple for $1
and i sell you the apple for $1
i have made $0 right
if i buy an apple for $1
and i sell it to you for $5
i have profited $4 right
the other thing that can happen is
if i buy an apple for $1
and i SELL it to you for $5
BUT THEN TOMORROW YOU WANT TO SELL IT BACK TO ME
well… obviously i’m not going to buy it for $5
because if i made a profit of $4 that would be stupid
i might buy it off you for $2 hence still making a $2 profit overall
then, i’ll sell it to you again for $5 thus making another $3 profit
so you see WE HAVE 2 PRICES
WE HAVE THE PRICE THAT I AM PREPARED TO SELL YOU THE APPLE FOR, which is $5
WE HAVE THE PRICE THAT I AM PREAPRED TO PAY FOR THE APPLE FROM YOU which is $2
this is the like the ASK and BID price in forex
if the market price for your instrument was 1000.00
and THE BROKER SOLD YOU THE INSTRUMENT for 1000.00
1000.00 - 1000.00 = 0.00 pips Right. so… The broker makes no profit
HOWEVER
if the REAL MARKET PRICE IS 1000.00
and you enter the trade (BUYING) but the broker SELLS IT TO YOU FOR 1000.03
then 1000.03 - 1000.00 = 3.00 pips
meaning, you got the instrument at a price that was 3 pips more expensive
hence THE BROKER HAS A 3 PIP HEAD START ON YOU
hence THE BROKER HAS MADE A PROFIT OF 3 PIPS
hence THERE IS A 3 PIP SPREAD
because the price that difference between the ASK and the BID is the spread
now if you want to Take Profit on this BUY order
IT MEANS YOU ARE SELLING when you close the trade
so… at that point, Your broker says… Ok, i’ll buy it from you at this price
the difference between the 2 prices is the spread
does that make sense ?
LASTLY
with regards to the dragging thing where it says 10526
what is that
i mean, if it’s the crosshair it means there are 1052.6 PIPS
are you sure you are not looking at the price instead of the POINTS ?
1 Like
Thanks for taking the time to write such a detailed answer. Can’t say I understand all that. But will read, analyse and try to understand it all slowly now. Cheers,
Clem
You/re Welcome
i have 2 things to say
-
it’s important that you understand this, so… which part did you not understand
-
These are very basic fundamentals, now… if you don’t understand them,… seriously (with all respect) Maybe forex isn’t for you.
i mean it’s one thing to not know what a pip or pippette is
and then someone explains it to you and you get it
but if you still don’t understand after several explanations , then…i guess if you don’t understand you don’t u nderstand, but then, it’s best to not trade at all because you’ll lose your money
have a think about this ok
I understand and agree with the point you are making. I will try hard to clear my confusion and lack of understanding. I will post here again soon to say how it is going.
Thanks and Cheers
Clem
To my thinking, (which probably is wrong), the difference in values between 6386.70 and 6386.44 will be 26 pips and
** the difference in values between 6386.70 and 6216.44 will be 105.26 pips. Where am I going wrong?**
[btw, on anther matter, she wasn’t really sure if it was 26 pips or 2.6, going by her initial response]
You also wrote:
"SHE ANSWERED YOUR QUESTION
the answer is 26 Pips
LET’S WORK IT OUT… ok
6386.70
and
6281.44
so… ignore everything before the decimal point"
Q: Why should we ignore everything before the decimal point? If that is correct, then the difference between ANY two numbers will be 26 pips as long as the two decimal parts are say, 70 and 44, or 62 and 36, is it not, irrespective of the numbers on the left of the decimal point, is it not?
.
No problem
and… i’m here to help, so… Honestly, don’t be afraid to ask
and there are no stupid questions… ok
don’t feel embarrased… seriously
also, i know it’s common knowledge to think that if you ask someone something too many times, they will get pissed off.
Keep in mind though
I’M NOT LIKE NORMAL PEOPLE… ok
I have a lot of patience and i have taught people this stuff before
so… long story short… SERIOUSLY if you don’t get it… ask
but in saying that
if you are not getting the concept of a pip after like a week
then like i said maybe it’s not for you,
forex is not for everyone at the end of the day, regardless whether you want to make money or not. it’s not for everyone
but IF YOU DO WANT TO PERSIST IN UNDERSTANDING THIS PIP THING
we need to do this
- We need to isolate, what you understand
- What you do not understand
- Why you do not understand it
as was the case with your chat with the broker,
there was a lot of going around in circles
lets DEFINE where you are confused
and if you have multiple areas of confusion
Pick one first, and let’s analyze that, then we move to the next one… ok
again, REGARDING PIPS
i remember when i came into this game, i also did not know or understand what a pip was, because it was a new term, it was just a word
now… WE HAVE TO GIVE THAT WORD A MEANING AND AN ASSOCIATION TO SOMETHING
you know the word
YOU LACK THE ASSOCIATION TO IT’S MEANING - this is what we need to clarify.
Look at it like this…
if we have me (in Australia, Sydney) and another guy in United States and another Guy in Europe (let’s say Italy) and another guy in the United Kingdom
and let’s we are all doing a skype chat together
and PIPS do not exist
and let’s say we are trading something neutral (not a currency) let’s say it’s gold for exampl
well. I’m going to say to the other guys, gold just went up by $1
Now. what does that mean to the guy in Europe hehe it means that it’s less than a $1 because Euro is stronger
whawt does it mean to the guy in the UK
what does it mean to the guy in the States,
GET IT, we all have a different meaning
because THE WAY I PERCEIVE $1 IS DIFFERENT TO THEIR DOLLAR OR POUND OR EURO
and we are not really talking about a dollar or Value to begin with
WE ARE TALKING ABOUT MOVEMENT
in the same sense that i said to you , a car moved 1 Metre from here to there
and then it moved back 2 Metres
same thing
A PIP IS A MEASURE OF MOVEMENT
but it doesn’t mean anything until you can quantify what it is
so when were were kids
we were told here is 10cents (at least in the 70’s hehe we were told that LOL)
so… You would look at this silver coin and be like WTF,
and it didn’t mean anything, UNTIL YOU FIGURED OUT YOU COULD GET A BLOODY BAG OF LOLLIES FOR THAT 10 CENTS at the local fish n chips shop hehe memories… huh
ok, so now we have an association
10 cents = 1 Bag of Lollies
Now, Your dad tells you here is a dollar ($1)
and he tells you that its’ worth exactly 10x the 10 cents
so, in the mind of a 6 year old in the 70’s
the currency was
10 cents = 1 Bag of lollies
$1 = 100 cents = 10 bags of lollies (aka, Xmas came early hehe)
so now the concept is understood
and you move forward from there
so to understand WHY A PIP WAS INVENTED
it was to safe time
so instead of saying to the guy in Europe, it moved $1 (AUD) then he has to convert that AUD to EURO then he tells you in Euro how much he plans to make in another trade then you have to convert that back to EURO then you have to tell the guy in the UIK and he has to convert EURO and AUD into GBP and holy shit, god forbid someone should make a mathematical error in all this
so… the industry kind of said
YOU KNOW WHAT, STUFF THIS
WE ARE GOING TO MAKE ONE POINT OF REFERENCE FOR EVERYONE
AND WE ARE GOING TO CALL IT “A PIP”
so
Lesson 1 - Price Movement is Measured in Terms of "Pips"
Lesson 2 - Price can move and be less than 1 pip, so , the smallest unit that we use to measure movement in price is called a PIPETTE
there are 10 Pippette’s to 1 Pip
so 1 Pip = 100 Pipettes
Lesson 3. Pipettes are more of a slang term, the correct term is POINTS or sometimes called BASIS POINTS
Lesson 4 if something happens that is less than a POINT (i’m going to keep calling it a point from here… ok) if something is less than a point PRICE DOES NOT MOVE
i know you understand this
because i have simply told you what a pip is, and what a point is
BUT YOU DON’T UNDERSTAND THE VALUE OF IT OR HOW MUCH IT IS
ok
Lesson 5. we trade in Pips and then we convert that to OUR OWN LOCAL CURRENCY and because our currency value fluctuates but the pip does not, what we get for each pip will differ from country to country
so… YOU NEED TO TEST IT. TO UNDERSTAND IT
Lesson 6
open a demo account
make sure your settings reflect your local currency
Put down 3 trades on say… EUR USD to start exactly the same price / Time
and make
Trade 1 = 0.01 Lots
Trade 2 = 0.10 Lots
Trade 3 = =1.0 Lots
set the take profit on all of them for 10 pips
and know what the spread is
now. let’s say you get something like this
Trade 1 = 0.01 Lots Profit = 0.70 cents
Trade 2 = 0.10 Lots Profit = $7
Trade 3 = =1.0 Lots Profit = $70
but the broker told you
0.01 lots = 10 cents per pip
0.10 Lots = $1 per pip
and
1.0 Lots = $10 per pip
well, let’s also say the broker said to you that during the trades the SPREAD was 3 pips
well it means this
TRADE 1
Started with a 3 Pip Loss, so… - 3 Pips
the price then went up by 10 PIP
hence -3 + 10 = 7
if your lots size of 0.01 means you are trading with 10 cents per pip
then 10 cents x 7 = 70 cents
got it
and the same for $1 x 7
and the same for $10 x 7
so now you will learn 2 things from this
- how much money you get from 10 PIPS on A CERTAIN CURRENCY
- how long the candle looks when it is 10 pips (Because based on which zoom level you select it can look really really big and the price appears to go really fast,
or if it’s too small price can appear to not move at all, but you are losing money somehow
as a guide, on your screen a 10 pip candle should measure around 2 cm maybe 3 at the most
and 1cm would be on the lower side,
but anything under 1 cm and your probably looking at it all wrong
or if you had 10 pips and the candle look like 15cm high hehe… that’s way way too stretched out
so keep it to around 1 - 2cm for every 10 pips and then you will get an idea of HOW PRICE MOVES, HOW QUICKLY IT MOVES AND HOW MUCH MONEY YOU WIN OR LOSE FROM SAID MOVEMENT
this will now create a mental association in your mind
SO YOU CAN QUANTIFY WHAT 1 PIP IS AND HOW MUCH IT IS WITH REFERENCE TO YOUR LOCAL CURRENCY
do that
Play with it on demo a bit
in previous posts i told you what the value of that instrument was that you were using
i told you what 1 pip was
and i told you where the 100 pip stop loss should be and at what price with respect to your entry price
you can also hover over the stop loss line and it will tell you how much you will lose if it hits the stop loss.
this will give you an idea of Distance vs Price
a pip just takes a bit of playing around with to get the hang on it
so do that … Experiment with it, on Demo
and put down different lot sizes and calculate the value per pip on your own
let me know if you need help
and let me know if anything did not make sense… ok
be cool
speak soon