Calculate the value of A PIP

#OPINIONLEADER#

As each currency has its own relative value it is neccessary to calculate the value of a pip for that particular currency pair.

Here below i mentioned one example please see, we will use a quote with 4 decimal places. for the purpose of better explaining the calculation excahnges rate will be expressed as a ratio(I.e., EUR/USD at 1.2500 will be written as "1 EUR/1.2500 USD")

Example1.USD/CAD+1.0200

To be read as ISD to 1.0200 CAD (or 1USD/1.0200CAD)

(The value change in counter currency) times the exchange rate ratio+ pip value (in terms of the base currency)

Using this example if we traded 10,000 units of USD/CAD. then a one pip change to the exchange rate would be approximately a 0.98 USD change in the position value (10000 units*0.0000984 USD/unit.)

We say aproximately because as the exchange rate changes so does the value of each pip move.

#OPINIONLEADER#