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This site is currently inactive as I have decided to move away from exclusively trading Forex in 2010 and as such will not be taking on new coaching clients in this area.

 



I have resumed my focus on coaching as a stock market mentor where I run a success guaranteed stock trading mentorship program

 



Additionally, you can now get access to what I consider to be the best stock options daily trade alert service.

 



Of course, I am biased and with a success rate fluctuating between 68.2% and 72.4% it is hard not to be biased.

 



If you do want to follow along with what I am doing every day you can get access to my daily stock market report 

 

 

You can read the step-by-step Bollinger Band Trading Strategy Guide - this is my main active trading strategy



Until next time


happy trading 


Mr Phil Newton or on LinkedIn Phil Newton trader

Pips and profit

macman's picture

Hi

 I'm really sorry if this has been answered before.  It is very basic.  I just can't seem to find an answer easily in the forum.

 Firstly, I want to understand pips.  My reading leads me to believe that they are 1/100th of a percent of the quote currency.  This is true for most currencies.  Exceptions are when the quote currency is a lot 'smaller' eg JPY.

 The number of decimals expressed in the trading platform doesn't necessarily reflect what a 'pip' is.

So, from the example at http://www.trade2win.com/media/knowledge/phil-newton/sept-02-04_8am_BO.html , the aim is to make a 'profit' of 36 pips.  I presume you then take the spread off this, eg 4 pips, to take it down to 32 pips.  My understanding is that you then divide this by the cross rate, in this case eg 133 to get the amount of the base currency you make per pip.  ie .32/133 = .0024.  So this means you make .0024 of a GBP per pip movement per pound traded.  Therefore, if you traded GBP100,000, you would make GBP240.

So, can you please go through the above and correct my mistakes to clarify for me how to understand pips and their translation into base currency.

 Kind Regards

MacMan