Pip value of the positions that depend on other currencies rates | Forex Factory

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Pip value of the positions that depend on other currencies rates

  • #1
  • First Post: Sep 25, 2008 4:19am Sep 25, 2008 4:19am
I am sorry for a newbish question but i didnt find the answer via search facility. The pip value of gbp/jpy is calculated as 1000/ USD/JPY rate. Assume i bought GBP/JPY 1 standard lot (100 k). USD/JPY rate was 107.00 at that moment. So my pip value was 1000/107.00 =~ 9,35$. For example I keep my position open for a long term, and USD/JPY reaches 121.00. So now the pip value of GBP/JPY according to the formula is: 1000/121 =~ 8,26 $. So will the pip value of my open position stay the same (9,35 $) as it was at the moment when I opened it, or will it change (to 8,26 $) according to the new USD/JPY rate? thank you in advance.
  • #2
  • Sep 25, 2008 9:13am Sep 25, 2008 9:13am
Your profit/loss is in JPY. It is not converted to USD until you close the trade. So when you track your P/L of open positions you use the current conversion rate not the one prevailing when you opened your position.
  • #3
  • Last Post: Sep 26, 2008 5:05am Sep 26, 2008 5:05am
Quoting euclid
Your profit/loss is in JPY. It is not converted to USD until you close the trade. So when you track your P/L of open positions you use the current conversion rate not the one prevailing when you opened your position.
thank you, euclid, for the information. it was just what i tried to find out. appreciated.
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