currency converter

Monday 4 July 2011

Pip value


pip value Determining is based on:
1 - size of the contract
2 - pair, who traded him

We will explain these points in some detail in the following

The change of exchange rates from the ground in parts of most of the time if I bought a small amount of one currency and sold it at a higher price than a thousand parts Undoubtedly you will not get the glory of the profit.
In order to be able to get a good profit in these minor changes to currency rates, must be buying and selling large quantities of currency (using the leverage provided by the brokerage firm).

Suppose now that the price of the euro against the dollar EUR / USD = 1.3850
I expect that the euro will rise to EUR / USD = 1.3851  i.e  one point.
Let's see how high the euro will win one point when we buy 1000 euros.

When you buy a 1000 euros return, will pay $ 1385, which will sell $ 1385.
Now you have a 1000 euros.

If the price rose one point and became the EUR / USD = 1.3851
Will sell the 1000 euros, and you will get an interview on the new price of $ 1385.1.
Profit = sale price - purchase price
= 1385.1 --1,385 = 0.1, ie, 10 cents

That any profit resulting from the sale of 1000 euros at the height of one point is 10 cents.

If we assume you sold the EUR at a height of 50 points will be a profit of $ 5. (50 points for Nqthaluahdh x.10), a simple profit is not worth it

But what if you buy 100,000 euros instead of 1000 euros on the same the previous prices?

Will buy 100,000 euros, and against which $ 138,500 will pay the price first.
Us now 100,000 euros.
When selling the euro to rise after the price of one point will get 138,510 dollars.
Profit = sale price - purchase price
= 138510-138500 = $ 10

That any profit resulting from the sale of 100,000 euros at the height of one point is $ 10.

If we assume you sold the EUR at a height of 50 points will be a $ 500 profit (50 points x $ 10 per point), a good profit

Thus, we see examples of the former Buying It got 1000 euros 10 cents for every point.
And that your purchase of 100,000 Euros got $ 10 for each point.

What determines the value of the point is the size of the amount you buy or sell the currency value of any Lot, or the size of the contract and, as this amount (the size of the contract) is greater the larger the value of the point, as noted in the examples of former

And vary the value of the point of a pair for the last example:
The value of one pip for the EUR / USD = $ 10.
The value of one point the pound sterling / U.S. $ = $ 10.
The value of one point for the dollar / yen, $ = 9.2 (approximately).
One point worth USD / CHF = $ 9 approx.

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