Calculation of pip value
Let's say that the exchange rate of GBP/USD is 1.25.
If it goes up 1 pip the value is 1.2500 + 0.0001 = 1.2501.
Let's say you are trading 1 Lot(I.e 100 000 units of currency).
To calculate the pip value you divide 1 pip by the exchange rate.
Thus ⇒ 0.0001/1.25
And multiply it by the number of currency in which in this case is 125 000 dollar.
Since 100 000 units of GBP currency cost 125 000 dollar(which is the deposit currency)
Thus ⇒ (0.0001/1.25)* 125 000
⇒ (0.00008)*125 000 = 10 dollar.
So for every pip your trade goes your way, you earn 10 dollar.
Let's say you aim for 10 pip scalp ⇒ 10 pip * 10 dollar = 100 dollar.
Meaning your pip value was: 10 dollar. And your profit was 100 dollar.
Note(!): If your deposit currency is GBP it would be (0.0001/1.25)*100 000, since 1 lot is worth 100 000 GBP
while in 1 lot if deposit currency is USD is worth 125 000 dollar.
Let's say that the exchange rate of GBP/USD is 1.25.
If it goes up 1 pip the value is 1.2500 + 0.0001 = 1.2501.
Let's say you are trading 1 Lot(I.e 100 000 units of currency).
To calculate the pip value you divide 1 pip by the exchange rate.
Thus ⇒ 0.0001/1.25
And multiply it by the number of currency in which in this case is 125 000 dollar.
Since 100 000 units of GBP currency cost 125 000 dollar(which is the deposit currency)
Thus ⇒ (0.0001/1.25)* 125 000
⇒ (0.00008)*125 000 = 10 dollar.
So for every pip your trade goes your way, you earn 10 dollar.
Let's say you aim for 10 pip scalp ⇒ 10 pip * 10 dollar = 100 dollar.
Meaning your pip value was: 10 dollar. And your profit was 100 dollar.
Note(!): If your deposit currency is GBP it would be (0.0001/1.25)*100 000, since 1 lot is worth 100 000 GBP
while in 1 lot if deposit currency is USD is worth 125 000 dollar.
Equality will be the next big thing in trading
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