GBPJPY and EURJPY

I am developing a hedge strat with GBPJPY and EURJPY but i am at a big confusion


Interbank FX says that the swap rate (standard lot) for long gbpjpy is 20 dollars


How do you calculate how much a pip (standard lot) is worth because i think i am entering in the wrong information for thier pip calculator. It says one pip is worth $4.29

If that was the case, why doesnt everyone go long at like 4:55 est and get the 20 dollars and close the trade...you can walk away with an easy 16 dollars profit?

So i am assuming a pip is worth more than what i am getting. Can someone tell me how to calculate the pip valule in usd for gbpjpy and eurjpy thnx

A pip is calculated by dividing the smallest increment for a given currency by the current exchange rate.

Using the GBPJPY as an example you would get: 0.01/233.18 = 0.0000428

This is expressed in terms of the base currency which in this case is the GBP. To convert to US Dollars you must multiply by the GBPUSD exchange rate which is currently 1.9592.

0.0000428 x 1.9592 = 0.0000838

To convert this to a standard lot you multiply by $100,000

0.0000838 x $100,000 = 8.38

As a general rule most pairs not ending in USD are around 8 pips and all pairs ending in USD are 10 pips. The only big exception to this is the EURGBP. This rule of thumb only applies to the majors.

It's really a question of how much you are willing to risk to make those $20. Don't forget, in most cases, the interest you recieve won't even cover the spread you paid to enter the position. You might also consider that price doesn't have to move in your favor, it could go against you and wipe out a lot of little $20 days. Also, be careful, not every broker conducts rollover at 5 PM ET.

THANKS SO MUCH


that is what i forgot to consider! The spread!

LOL

Thnx for all the info!

...it's got a low spread, it's pretty volatile (I calculated a 10-day average trading range of 159.8 pips for the first two weeks of June) and it's open during Asian trading hours (which is where I live).

This .pdf article shows how to use volatility to your advantage, and it includes some graphs from EUR/JPY. It's from "Tech. Analysis of Stocks & Commodities" magazine.

What is going to be the next step to eur jpy tonite?

I think the rate could try to jump the gun on the Down Under open. If it meets stiff resistance, It would probably pull back to ~169 before trying higher again. Right now, the big sharks are fixated by the barriers and stops at the 170 level, so the bias is def up.

EUR/JPY peaked at 169.66 this morning and is in a downward channel,
but still around 168.90 as we speak.

As far as indicators go, the "COT report" seems like an ideal way to gauge
the sentiment of the big boys. You can find it on some websites, where it is
classified as fundamental analysis.

It graphs committed longs and shorts and gives you easy to read info on
the subject.