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1.8 ****Common Question 2 综合问题2****: Page 2 of 4

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What is pips in Forex

Here is where we’re going to do a little math. You’ve probably heard of the terms “pips,” “pipettes,” and “lots” thrown around, and here we’re going to explain what they are and show you how their values are calculated.

Take your time with this information, as it is required knowledge for all forex traders. Don’t even think about trading until you are comfortable with pip values and calculating profit and loss.

What the heck is a Pip? What about a Pipette?

The unit of measurement to express the change in value between two currencies is called a “pip.” If EUR/USD moves from 1.2250 to 1.2251, that .0001 USD rise in value is ONE PIP. A pip is usually the last decimal place of a quotation. Most pairs go out to 4 decimal places, but there are some exceptions like Japanese Yen pairs (they go out to two decimal places).

Very Important: There are brokers that quote currency pairs beyond the standard “4 and 2″ decimal places to “5 and 3″ decimal places. They are quoting FRACTIONAL PIPS, also called “pipettes.” For instance, if GBP/USD moves from 1.51542 to 1.51543, that .00001 USD move higher is ONE PIPETTE.

As each currency has its own relative value, it’s necessary to calculate the value of a pip for that particular currency pair. In the following example, we will use a quote with 4 decimal places. For the purpose of better explaining the calculations, exchange rates will be expressed as a ratio (i.e., EUR/USD at 1.2500 will be written as “1 EUR/ 1.2500 USD”)

Example exchange rate ratio: USD/CAD = 1.0200. To be read as 1 USD to 1.0200 CAD (or 1 USD/1.0200 CAD)

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

[.0001 CAD] x [1 USD/1.0200 CAD]

Or Simply

[(.0001 CAD) / (1.0200 CAD)] x 1 USD = 0.00009804 USD per unit traded

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 (10,000 units x 0.0000984 USD/unit). (We use “approximately” because as the exchange rate changes, so does the value of each pip move)

Here’s another example using a currency pair with the Japanese Yen as the counter currency.

GBP/JPY at 123.00

Notice that this currency pair only goes to two decimal places to measure a 1 pip change in value (most of the other currencies have four decimal places). In this case, a one pip move would be .01 JPY.

(The value change in counter currency) times the exchange rate ratio = pip value (in terms of the base currency)[.01 JPY] x [1 GBP/123.00 JPY]

Or Simply

[(.01 JPY) / (123.00 JPY)] x 1 GBP = 0.0000813 GBP

So, when trading 10,000 units of GBP/JPY, each pip change in value is worth approximately 0.813 GBP.

Finding the Pip Value in your Account Denomination

Now, the final question to ask when figuring out the pip value of your position is, “what is the pip value in terms of my account currency?” After all, it is a global market and not everyone has their account denominated in the same currency. This means that the pip value will have to be translated to whatever currency our account may be traded in.

This calculation is probably the easiest of all; simply multiply/divide the “found pip value” by the exchange rate of your account currency and the currency in question.

If the “found pip value” currency is the same currency as the base currency in the exchange rate quote:

Using the GBP/JPY example above, let’s convert the found pip value of .813 GBP to the pip value in USD by using GBP/USD at 1.5590 as our exchange rate ratio. If the currency you are converting to is the counter currency of the exchange rate, all you have to do is divide the “found pip value” by the corresponding exchange rate ratio:

.813 GBP per pip / (1 GBP/1.5590 USD)Or

[(.813 GBP) / (1 GBP)] x (1.5590 USD) = 1.2674 USD per pip move

So, for every .01 pip move in GBP/JPY, the value of a 10,000 unit position changes by approximately 1.27 USD.

If the currency you are converting to is the base currency of the conversion exchange rate ratio, then multiply the “found pip value” by the conversion exchange rate ratio.

Using our USD/CAD example above, we want to find the pip value of .98 USD in New Zealand Dollars. We’ll use .7900 as our conversion exchange rate ratio:

0.98 USD per pip X (1 NZD/.7900 USD)Or

[(0.98 USD) / (.7900 USD)] x (1 NZD) = 1.2405 NZD per pip move

For every .0001 pip move in USD/CAD from the example above, your 10,000 unit position changes in value by approximately 1.24 NZD.

Even though you’re now a math genius–at least with pip values–you’re probably rolling your eyes back and thinking, “Do I really need to work all this out?” Well, the answer is a big fat NO. Nearly all forex brokers will work all this out for you automatically, but it’s always good for you to know how they work it out.

If your broker doesn’t happen to do this, don’t worry – you can use our Pip Value Calculator! Aren’t we awesome?

In the next section, we will discuss how these seemingly insignificant amounts can add up.

 

什么是点和十分之一点

 

我们将在这里做一些小算数。您可能已经听说过这些字眼“点 pips”,“十分之一点pipettes”和“手数 lots”。接下来在这里,我们将解释它们是什么,并示范如何计算它们出来的。

花点时间慢慢掌握下面的这些信息,因为它是所有外汇交易者必须知道的常识。在你能够灵活自如的运用点值 和 计算盈亏之前,你最好不要去想交易的事。

点到底什么是鬼东西? 十分之一点又是什么?

用来衡量两种货币之间,汇率变化的基本单位就称为“点 Pip”。如果 欧元/美元 从1.2250升至1.2251,这就是一个点的变动。 点值是从外汇报价的最后一个小数位算起,如果是 非日元的货币对,一般有四个小数位。如果是 含日元的货币对,那么它的货币报价应该只有两个小数位。

非常重要: 有些经纪商的报价,货币对汇率的小数位 超出标准的“4和2”达到“5和3”小数位。他们就用 小数点(FRACTIONAL PIPS) 来报价 ,也称为十分之一点(pipettes)。例如,如果英镑/美元 从1.51542 升至 1.51543,它移动了 0.1点(ONE PIPETTE)。

由于每种货币都有它自身的价值,所以我们需要知道如何计算,个别货币的每一个点是多少价值。在下面的例子中,我们将使用4小数位的报价。

先以 基础货币为美元,的货币对 为例子,计算方法为:

1. 美元/瑞郎 汇率为 1.5250
0.0001除以 汇率 = 点的价值
0.0001 / 1.5250 = $ 0.0000655

2. 美元/加元 汇率为1.4890
0.0001除以汇率=点的价值
0.0001 / 1.4890 = $ 0.00006715

3. 美元/日元 汇率为119.80
注意:这货币对只有两个小数位(其他多数的货币对有四个小数位)。
在这种情况下,1点的单位为 .01。
0.01除以汇率= 点的价值
0.01 / 119.80 = $ 0.0000834

在不是以 基础货币为美元的例子,我们希望得到美元的 1个点数价值,就必须增加一个步骤。

1. 欧元/美元 的汇率为 1.2200
0.0001除以汇率=点的价值
因此 0.0001 / 1.2200 = 0.00008196欧元
但是,我们需要换回到美元,所以我们必须加一个计算步骤

欧元价值 x 汇率
所以 0.00008196 x 1.2200 = $ 0.00009999
当进位后就是 0.0001

2. 英镑/美元 的汇率为 1.7975
0.0001除以汇率=点的价值
因此 0.0001 / 1.7975 = 0.0000556英镑
但是,我们需要换回到美元,所以我们必须加一个计算步骤

英镑价值 x 汇率
所以 0.0000556 x 1.7975 = $ 0.0000998
当进位后就是 0.0001

你可能会睁大眼睛的看着上面的计算过程,同时纳闷“难道我真的需要亲自动手来计算这些东西吗?” 嗯,答案是一个大大肥肥的 。几乎所有的外汇交易商将自动为你算出这些答案,但你知道怎么把它们计算出来总是有好处的。

在下一节课中,我们将探讨,这些看似微不足道的金额,怎样积少成多。