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  1. #1
    Senior Member raymond09's Avatar

    What is the value of a Pip? !!!

    What is the value of a Pip?
    I see some currencies have four decimal places and some have five. If I wanted to apply a MM strategy and set an S/L I would need to know the risk. I would like to use something like a 2 to 1 ratio whereas my S/L would equal 50% of my target price. But, I can't figure out the value of (1) Pip. Typical newbie question, but hope someone will answer.
    Thanks

  2. #2
    Master Member Bogdan G's Avatar
    Good luck setting a Stop Loss in Binary Options trading

  3. #3
    Specialist Member marvel's Avatar
    Quote Originally Posted by raymond09 View Post
    What is the value of a Pip?
    I see some currencies have four decimal places and some have five. If I wanted to apply a MM strategy and set an S/L I would need to know the risk. I would like to use something like a 2 to 1 ratio whereas my S/L would equal 50% of my target price. But, I can't figure out the value of (1) Pip. Typical newbie question, but hope someone will answer.
    Thanks
    The question you asked is not relevant to binary trading, there is no such thing like SL or TP in binary options. They are predefined trades with fixed return (when win) and refund (when losing the trade). In forex the value of a pip is easily calculated (Position size) x (% value of a pip). For example you have 1000$ position (one micro lot) and 1 pip on EUR/USD i.e (1.3001/1.3000)x100 (5). Than you multiply 1000% with the calculated percentage value of a pip and that’s it

  4. #4
    Specialist Member LesterK's Avatar
    Marvel is right – the value of a pip depend on your position size, and the particular price of the pair you trade. It will not be the same even in one and the same pair but in different moment of times as the pair changes its price over time.

  5. #5
    Solid Member
    When you're looking at pips, the 4th decimal place is the one to look at. 1.29500 and 1.29510 would have a difference of one pip. The fifth decimal place is sometimes called a "pipette", and is simply 1/10th of a pip.
    To answer your question: Most currencies for binaries are traded to the 5th decimal place, meaning you can win by as little as 1/10th of a pip (or lose, yuck). Any of the Yen crosses only trade to the 3rd decimal place, and this is normal.
    Another important thing to note is that some brokers display to the nearest pip (4th decimal place) on all their pairs, rather than to the fifth. So you may see only 4 decimal places depending on who your broker for binaries is, as well as which broker you're using for feeds to MetaTrader (if you use that).

  6. #6
    Legendry Member willyw's Avatar
    Quote Originally Posted by crimson69 View Post
    When you're looking at pips, the 4th decimal place is the one to look at. 1.29500 and 1.29510 would have a difference of one pip. The fifth decimal place is sometimes called a "pipette", and is simply 1/10th of a pip.
    To answer your question: Most currencies for binaries are traded to the 5th decimal place, meaning you can win by as little as 1/10th of a pip (or lose, yuck). Any of the Yen crosses only trade to the 3rd decimal place, and this is normal.
    Another important thing to note is that some brokers display to the nearest pip (4th decimal place) on all their pairs, rather than to the fifth. So you may see only 4 decimal places depending on who your broker for binaries is, as well as which broker you're using for feeds to MetaTrader (if you use that).
    Crimson69, your post does not answer raymond09 question. He is asking what is the VALUE of a pip and not WHAT IS A PIP. For cable (GBP/USD) and EUR/USD is at $10 per pip and the pip value of other currency pairs varies according to the market price at the time of currency pair quote, ie (minimum price movement/market price) x USD10,000

  7. #7
    Veteran Member uj.forex's Avatar
    the value of a pip varies from pairs to pairs... for USD pairs, the value of a pip is 1... whereas, if u trade crosses like Eur/Jpy and Gbp/Jpy, then the value or return/loss per pip would be more than 1... it is because of the difference in the exchange rates of the base and counter currency in the pair....

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