Price per pip/point

Hi

I have a question.

What dictates the value of a pip/point (another question is,is there a difference between the two)

The reason I ask is this.

A few regulars may know I've been demo trading for approximately 2 years now and STILL learning.(but very profitable to date)

The reason I ask the question is,I am running a demo account (£1k) 50:1 leverage and buy only one size position at a time (0.1),all of my previous trades equate to approximately (6/6.5p) a pip/point,but my last trade (for some reason,(I assume it's volatilaty/volume was 10p a pip/point)

Any advice,particularly why the difference on this would be much appreciated

Regards

Ken

don't get things confused.

a pip is a pip. a point is a point, which can sometimes also equal a pip.

a pip on yen pairs is (off the top of my head since i don't look at yen pairs) 0.01, whereas on other currency pairs not involving the yen they are 0.0001. that is to say, on eur/usd a pip is $0.0001. a pip up means the price of the currency pair increased by $0.0001. a pipette is 1/10th of a pip, so on yen pairs a pipette is $0.001, and on other pairs is $0.00001... or basically, a pipette shows one extra decimal place in the prices.

a POINT, is whichever method of pricing the broker adheres to, or to put it another way a point is the smallest decimal place to which the broker reports prices. if they price to the standard pip then a point equals a pip. if the broker quotes prices to the somewhat newer decimal position of pipettes then a point in this case means a pipette (that is, a point in this case is 1/10th of a pip).

some people misuse the term pip when in fact they mean pipette. so when they say 100 pips they really mean 100 pipettes which is only 10 pips. when they talk about points then what they mean is ambiguous until they say how many decimals their broker quotes to so that you can know if they mean a pip or a pipette.

as for why your amount/point drastically changing i can only assume you went from trading one currency pair to a different pair. the amount that a change of 1 point means on one currency pair is different to another (unless the prices are identical). a pair priced at $1.5000 will have a $/point value different to a pair priced at $0.8000.

think about it this way. the percentage of change between 1 and 2 is a 100% increase. the percentage of change between 100 and 101 is only a 1% change. they both stepped-up by the same amount, but the degree of change was different because they started at different values.

Thanks for that brilliant explanation

no prob. was i right about why your $/pip value changed so dramatically or is it something else?

No it was on the same currency pair,but thanks again

Regards

Ken