In the past, spot forex was only traded in specific amounts called lots. The standard size for a lot is 100,000 units. There are also a mini, micro, and nano lot sizes that are 10,000, 1,000, and 100 units respectively.

As you may already know, the change in currency value relative to another is measured in “pips,” which is a very, very small percentage of a unit of currency’s value. To take advantage of this minute change in value, you need to trade large amounts of a particular currency in order to see any significant profit or loss.

Let’s assume we will be using a 100,000 unit (standard) lot size. We will now recalculate some examples to see how it affects the pip value.

1. USD/JPY at an exchange rate of 119.80(.01 / 119.80) x 100,000 = $8.34 per pip
2. USD/CHF at an exchange rate of 1.4555(.0001 / 1.4555) x 100,000 = $6.87 per pip

In cases where the U.S. dollar is not quoted first, the formula is slightly different.

1. EUR/USD at an exchange rate of 1.1930(.0001 / 1.1930) X 100,000 = 8.38 x 1.1930 = $9.99734 rounded up will be $10 per pip
2. GBP/USD at an exchange rate or 1.8040(.0001 / 1.8040) x 100,000 = 5.54 x 1.8040 = 9.99416 rounded up will be $10 per pip.

Your broker may have a different convention for calculating pip value relative to lot size but whichever way they do it, they’ll be able to tell you what the pip value is for the currency you are trading is at the particular time. As the market moves, so will the pip value depending on what currency you are currently trading.

What the heck is leverage?

You are probably wondering how a small investor like yourself can trade such large amounts of money. Think of your broker as a bank who basically fronts you $100,000 to buy currencies. All the bank asks from you is that you give it $1,000 as a good faith deposit, which he will hold for you but not necessarily keep. Sounds too good to be true? This is how forex trading using leverage works.

The amount of leverage you use will depend on your broker and what you feel comfortable with.

Typically the broker will require a trade deposit, also known as “account margin” or “initial margin.” Once you have deposited your money you will then be able to trade. The broker will also specify how much they require per position (lot) traded.

For example, if the allowed leverage is 100:1 (or 1% of position required), and you wanted to trade a position worth $100,000, but you only have $5,000 in your account. No problem as your broker would set aside $1,000 as down payment, or the “margin,” and let you “borrow” the rest. Of course, any losses or gains will be deducted or added to the remaining cash balance in your account.

The minimum security (margin) for each lot will vary from broker to broker. In the example above, the broker required a one percent margin. This means that for every $100,000 traded, the broker wants $1,000 as a deposit on the position.

How the heck do I calculate profit and loss?

So now that you know how to calculate pip value and leverage, let’s look at how you calculate your profit or loss.

Let’s buy U.S. dollars and Sell Swiss francs.

1. The rate you are quoted is 1.4525 / 1.4530. Because you are buying U.S. dollars you will be working on the “ask” price of 1.4530, or the rate at which traders are prepared to sell.
2. So you buy 1 standard lot (100,000 units) at 1.4530.
3. A few hours later, the price moves to 1.4550 and you decide to close your trade.
4. The new quote for USD/CHF is 1.4550 / 1.4555. Since you’re closing your trade and you initially bought to enter the trade, you now sell in order to close the trade so you must take the “bid” price of 1.4550. The price traders are prepared to buy at.
5. The difference between 1.4530 and 1.4550 is .0020 or 20 pips.
6. Using our formula from before, we now have (.0001/1.4550) x 100,000 = $6.87 per pip x 20 pips = $137.40

Remember, when you enter or exit a trade, you are subject to the spread in the bid/offer quote. When you buy a currency, you will use the offer or ask price and when you sell, you will use the bid price.

Next up, we’ll give you a roundup of the freshest forex lingos you’ve learned!

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 不 。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。

What is Leverage

定义杠杆和保证金

什么是杠杆？

我们知道我们处理过相关内容，但是由于这个话题十分重要，我们觉得有必要再讨论一下。

教科书中“杠杆”的定义是能什么也不用或用较小的自有资金控制大量的资本，剩下的资金则为借入资金。

例如，要控制10万的仓位，经纪商会从你的账户中拨出1千美元。你的杠杆，用比率表示，就是100:1。

你用1千美元控制了10万美元。

假设10万美元的投资上涨到价值10.1万美元。如果你要提供全部10万美元的的资本，你的回报仅为微不足道的1%(获利1千美元/初始投资10万美元)。

这也被称为1:1杠杆。当然我认为1:1杠杆是误称，如果你拿了你要控制的全部资金，哪里还有什么杠杆！

幸运的是，你没有1:1杠杆，你的杠杆是100:1。你的经纪商只需拨走你1千美元钱，所以你的回报是绝妙的100%。(获利1千美元/初始投资1千美元)。

现在，我们想让你做一个快速的练习。计算一下如果你损失了1千美元，你的收益是多少。

如果你按照我们之前的方法计算，也就是正确的方法，你用1:1杠杆，你的收益是-1%，你用100:1杠杆，你的收益是-100%。

你可能听过这句老话“杠杆是一把双刃剑。”或“杠杆是双行道。”正如你所知道的，这些老话没骗人。

什么是保证金？

那么术语“保证金”是什么？好问题。

让我们回到之前的例子：

例如，在外汇市场，要交易10万的规模，你的经纪商要拨出你账户中的1千美元。你的杠杆，用比率表示，就是100:1。你用1千美元控制了10万美元。

这1千美元是你为了使用杠杆交出的“保证金”。

保证金是通过你的经纪商开仓所需的用作“诚信押金”的一笔钱。你的经纪商用于维护你的仓位的。你的经纪商拿走你的押金和其他所有人的放在一起，并用这个“超级保证金账户”在同业银行网络间交易。

保证金通常表示为实际账户的百分比。例如，大多数经纪商说他们需要2%，1%，0.5%或0.25%的保证金。

基于你的经纪商所要求的保证金，你可以计算你使用交易账户时最大的杠杆。

如果你的经纪商要求的保证金是2%，你的杠杆是50:1.下面是多数经纪商提供的较受欢迎的杠杆“口味”：

除了“所需保证金”，你还会在你的交易平台上看到其他“保证金”相关术语。这些“保证金”的意思很容易混淆，以此我们尽力明确每一个术语的定义：

所需保证金：这个很简单，因为我们刚刚讨论过。保证金是通过你的经纪商开仓所需的资金。保证金通常用百分比表示。

账户保证金：这是“交易资金”的另一种说法。它指的是你的账户总额。

占用保证金：经纪商“冻结”的用以保持你现有仓位的资金。尽管这钱仍然是你的，你不能碰它，直到你的经纪商把它还给你，或者你关闭了现有交易，或你收到了追加保证金的要求。

可用保证金：这是你账户中可用来开新仓的资金。

追加保证金：你收到这一要求当你账户里的钱不能覆盖你可能的损失。当你的资产净值低于占用保证金是，这会发生。如果你收到了追加保证金，你的部分或所有的开仓头寸被经纪商以市价关闭。

What is Spread