Forex calculations are simply the methods and ways of calculating basic components of Forex trading. These methods are unique to a particular problem and help proffer solution to the problems. The Forex trades over the years have encountered insurmountable obstacles but through this formula have relieved the problems of Forex trading. The Forex trading is quite a complex structure and requires a bit of mathematical know how in order to become a guru in the market. This surely doesn't require the trader to be a rocket scientist but rather lets the trader known he/she has to have basic knowledge of mathematics to beat his/her problems. If the trader can't calculate this problems then is only necessary that they employ the help of an expertise to help savor the situation, but this will only lead to more ridiculous expenses on the side of the trader as this is what they ought to know to avoid being taken advantage of that could lead to falling out between both parties.
THE FOLLOWING ARE WAYS OF CALCULATING PIP VALUES WHICH IS A FORMULA FOR FOREX TRADING
These formulas are quite numerous and they include the following methods which are peculiar to the problem at hand and tend to proffer possible solutions to them. They include any of the following;
HOW TO UNDERSTAND PIP VALUE
Pip is a unit of measure designed to highlight occurrence in the rate of a pair of currency.
The pip value is among one of the methods through which traders tend to know how much profit they got or failed on a trade. Instance, when you go in for a long position on AUD/USD at 1.6560 and it falls to 1.6600 at end of closing position you close your position you got a 60 pip value gain
When you trade short position at 1.6570 and it falls to 1.6600 you fall by 50 pips. Don't forget, the term short denotes that you intend the price to fall down. This means that, if the trader short at 1.6560 and price moves to 1.6530, you tend to get 50 pips gain.
Let's take for instance
The Trade 1 – AUD/JPY
The Long entry is at 170.50
The Exit point is at 172.86
The gain/fall= +37 pips value
The Trade 2 – GBP/USD
The Long entry at 1.6076
The Exit point is at 1.6006
The gain/fall = -60 pips value
The Trade 3 – JPY /USD
The Short entry is at 1.3490
The Exit entry is at 1.3190
The gain / fall is at = +280 pips value
The Trade 4 – CAD/USD
The Short entry is at 1.0860
The Exit entry is at 1.0820
The gain/fall is at = +30 pips value
The Trade 5 – AUD /EUR
The Long entry is at 1.4056
The Exit entry is at 1.3050
The gain/loss is at = -1002 pips value
To check the current rate of pip value use;
Use the following method that is pip / exchange rate = the value for every 1 pip
If USD/CHF = 1.0810
Then it means that 0.0001 / 1.0810 = 0.00009250
That is then the 1 PIP = 0.00009250 USD
Looking at this value it's not a big bucks but when the leverage is calculated it could amount to much.
Suppose the USD/JPY = 96.27
Then the 0.01 / 96.27= 0.0001038
The 1 PIP will be = 0.0001038 USD
Suppose USD/CHF = 1.0810
0.0001 / 1.0810 = 0.00009250
Then the 1 PIP = 0.00009250 USD
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