a tick is not a pip in forex | Forex Factory

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a tick is not a pip in forex

  • #1
  • First Post: Edited 7:12am Jan 3, 2009 4:31am | Edited 7:12am
We made a shocking and very disturbing discovery: a tick is not quite a pip in forex (we even argued for that, but he was right - never take anything for granted)

Running a simple script like this:

int start()
{ Print("tick size= ",MarketInfo(Symbol(),MODE_TICKSIZE),
" - tick value= ",MarketInfo(Symbol(),MODE_TICKVALUE));
return(0);
}

what we got after some hours was this:

22:40:20 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:24 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:27 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:30 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:31 ticksize GBPCHF,M1: tick size= 0.0002 - tick value= 17.07
22:40:32 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:46 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53

WTF!!!
forexflash
  • #2
  • Jan 3, 2009 5:09am Jan 3, 2009 5:09am
Quoting FOREXflash
We made a shocking and very disturbing discovery: a tick is not quite a pip in forex (we even argued for that, but he was right - never take anything for granted)

Running a simple script like this:

int start()
{ Print("tick size= ",MarketInfo(Symbol(),MODE_TICKSIZE),
" - tick value= ",MarketInfo(Symbol(),MODE_TICKVALUE));
return(0);
}

what we got after some hours was this:

22:40:20 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:24 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:27 ticksize GBPCHF,M1: tick...
Strange,

if i am having runing loss of 100pip on 100k pos.
and in terms of $ it is 100 *8.53 = 853$
Now if suddenly tick value change. and becomes 17.07
Loss will be 100*17.07 = 1707$.

Sudden margin call...and i will keep searching what happen...
  • #3
  • Jan 3, 2009 6:57am Jan 3, 2009 6:57am
A tick is certainly not a pip in forex and it is no definite number in any market.

A tick is just the price at which a transaction has been concluded between a buyer and a seller.
In a very liquid market like forex a tick is often lower than a pip, when liquidity is thin volatility gets higher and the ticks become wider.
The last tick on your chart is the price at which the last transaction between a buyer and a seller occured.The following tick will be the price at which the next transaction is settled, it could very well be at a price 50 or 0.5 pips over or under the price at which the previous transaction occured.
And i will add that it could happen two millisecond after the previous tick or fifteen minutes later.
  • #4
  • Jan 8, 2009 6:00pm Jan 8, 2009 6:00pm
exactly as the guy above me said. a tick is basically how much the pair moved the last time it moved, or in other words, the difference in price between the current price and the last quoted price.

pairs in forex dont have to move tick by tick. in a low volume market, the next fillable order might not be one pip away, but could be 3 or 4 pips away (in your example it was 2). so the price jumps 4 pips in one tick. a tick is the move the currency makes, pips are the size of the ticks.

in low liquidity pairs using currencies like the iceland krona or whatever, i have seen ticks that have been 30 or 40 pips.
  • #5
  • Jan 9, 2009 12:13pm Jan 9, 2009 12:13pm
Quoting ablg
A tick is certainly not a pip in forex and it is no definite number in any market.

A tick is just the price at which a transaction has been concluded between a buyer and a seller.
In a very liquid market like forex a tick is often lower than a pip, when liquidity is thin volatility gets higher and the ticks become wider.
The last tick on your chart is the price at which the last transaction between a buyer and a seller occured.The following tick will be the price at which the next transaction is settled, it could very well be at a price 50 or...
Good explanation, I´ve learned lots guys just reading your posts, more in this moment or high volatility where the transactions and the orders tend to be confusing in comparison with time ago. it really helps me not to commit mistakes, I hope!!
  • #6
  • Jan 20, 2009 7:45am Jan 20, 2009 7:45am
So both ticks and pips value in currency trading is fix or fluctuated?
Because as far as i am concern standard pips value for Major is $1.
Does the tick movement reflected every value in pips change?

Seems that this is a valuable knowledge for scalpers..
  • #7
  • Jan 20, 2009 7:55am Jan 20, 2009 7:55am
Quoting FOREXflash
We made a shocking and very disturbing discovery: a tick is not quite a pip in forex (we even argued for that, but he was right - never take anything for granted)

Running a simple script like this:

int start()
{ Print("tick size= ",MarketInfo(Symbol(),MODE_TICKSIZE),
" - tick value= ",MarketInfo(Symbol(),MODE_TICKVALUE));
return(0);
}

what we got after some hours was this:

22:40:20 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:24 ticksize GBPCHF,M1: tick size= 0.0001 - tick value= 8.53
22:40:27 ticksize GBPCHF,M1: tick...
Hi

To me it seems a question of definition.

At 22:40:31 your tick value is still the same - taking into account that the price at that point has moved 0.0002 and not 0.0001 like the rest in your table.

So, for everyone: if you have a position of lets say 1 lot and your tick value is 8,53 and you have bougt at 1.0000 and then you sell at 1.0010 you have made 10 X 8,53 whether the price during that time at some point jumped 2 ticks from 1.0003 to 1.0005 without having a transaction registered at 1.0004, your value per tick stays the same.

regards
daytrading
Enter Signature
  • #8
  • Jan 20, 2009 8:44am Jan 20, 2009 8:44am
For those who seeem to have a problem with the definitions of pip and tick i will try to give a simple explanation, english is not my native language mind you.

A pip is an increment of price and is fixed. Between eur/usd at 1.2964 and eur/usd at 1.2972 there is a difference of 8 pips, which with one standard lot has a value of 80 dollars.

A tick is the difference of price between transactions that effectively happened.

This difference of price between two transactions can have any value in theory though there rarely is more then 10 pips difference except with some exceptional knews time.

On your chart between 1.2964 and 1.2972 you will see prices of 1.2965, 66,67,68, 69,70 and 71. Those are pips. But price probably didn't move in a linear line respecting every pip to get from 1.2964 to 1.2972.

It probably went from 1.2964 to 1.2966 then 1.2965 then 66, 65 again, 67,etc.

When price went from 1.2964 to 1.2966 it was a tick with a value of two pips, next tick it went down to 65 this time the tick had a value of one pip.

Hope i was clear and could enlighten some.
  • #9
  • Last Post: Jan 20, 2009 12:48pm Jan 20, 2009 12:48pm
Quoting mtvortex
So both ticks and pips value in currency trading is fix or fluctuated?
Because as far as i am concern standard pips value for Major is $1.
Does the tick movement reflected every value in pips change?

Seems that this is a valuable knowledge for scalpers..

no your right, a pip is $1, but there can be multiple pips in a tick. a tick is just the amount of pips the currency moved from it's previous price. say the price jumped up from 1.0000 to 1.0005 in one move. there was only one tick, but there were five pips in that tick.

does that help at all?
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