PIP vs Profit

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where do I go to find out more about pips vs profit?

What I want to know is if 2 different pairs that are priced way differently, move in the same direction the

exact number of pips, does the profit move the same?

Example:

Eurusd right now is 1.44286 and Eurjpy is 119.93 (Friday 15th, 2011 after close)

if they both go up 100 PIPs, is the profit on each the same?

 

No.....some of the pairs are $10/pip per standard lot and others are more or less. Profit really also depends on the size of your lot.
If you are trading 1 standard lot (100,000) on EUR/USD then 100 pips is equal to $1000 profit. One lot on EUR/JPY going the same 100 pips is equal to roughly $1200 profit.
Naturally, the rates fluctuate, which is why forex exists in the first place.


Here is a free online pip calculator that will calculate the pip value for you: http://www.goforex.net/pip-calculator.htm

If you're trading more than 1 standard lot then just multiply pip value x number of lots x pips traveled for whatever currency pair you're trading. If you're trading less than a lot, just make the fractional decimal and multiple using the same method.

 

Thanks... I will check out the calculator.

So if I wanted EUR/USD and EUR/JPY to have their profit/loss move exactly the same, then I would buy/sell 1.2 lots of EUR/USD and buy/sell 1 lot EUR/JPY. (either buy or sell, but do both the same).

Now when the market moves, if both move the same number of pips, then the profit/loss will be the same? Do I understand that right? What if the variance was much greater? Like one pair trading at 110.95 and another pair trading at 0.98675, then the lots would have to be hugely different to have them have the same profit/loss as they moved?

Bottom line, I'm wondering if pairs that move in the same way can be ordered in such a way as to have the same profit/loss based on similar moves.?

 

You should google for a "currency map," which will tell you the correlation of the pairs. It will help you understand which pairs are likely to follow with the same/similar moves.

EUR/USD and EUR/JPY are two generally unrelated pairs, so you can't be certain both pairs will move the same direction (unless the Euro is just having a really bad day!). EUR/JPY may not move as far or as quickly as EUR/USD...you cannot expect it to behave as other currencies do. I don't know much about that pair since I only trade majors (EUR/USD, GBP/USD, USD/JPY, etc) with exception to XAU/USD (gold) and USD/DKK, which I find quite predictable and generally profitable. Anyways, if EUR/USD moves 100 pips on your suggested 1.2 lots, then yes it would be equal to the 100 pip move on 1 lot of EUR/JPY. But only if you placed the lots at those sizes. Under normal lot trading conditions you would use position sizing for each trade and just use either a percentage, ratio, etc or fixed position regardless of the currency you are trading.

I wouldn't necessarily be too focused on the numbers or differences in digits, you just need to know that every pair can have a difference in pip value. If you specifically wanted to mirror profits for each pair then you would have to do as you mentioned, change lot sizes. But in my opinion, the likelihood of two unrelated pairs making the exact same move is quite unlikely. I would be more concerned with making sure I treat each trade on different pairs individually.

I understand your bottom line but I am probably not the best expert to answer your questions as I myself occasionally ponder the same things.

  
double  PointValuePerLot() { // Value in account currency of a Point of Symbol.
    /* In tester I had a sale: open=1.35883 close=1.35736 (0.00147)
     * gain$=97.32/6.62 lots/147 points=$0.10/point or $1.00/pip.
     * IBFX demo/mini       EURUSD TICKVALUE=0.1 MAXLOT=50 LOTSIZE=10,000
     * IBFX demo/standard   EURUSD TICKVALUE=1.0 MAXLOT=50 LOTSIZE=100,000
     *                                  $1.00/point or $10.00/pip.
     *
     * https://forum.mql4.com/33975 CB: MODE_TICKSIZE will usually return the
     * same value as MODE_POINT (or Point for the current symbol), however, an
     * example of where to use MODE_TICKSIZE would be as part of a ratio with
     * MODE_TICKVALUE when performing money management calculations which need
     * to take account of the pair and the account currency. The reason I use
     * this ratio is that although TV and TS may constantly be returned as
     * something like 7.00 and 0.00001 respectively, I've seen this
     * (intermittently) change to 14.00 and 0.00002 respectively (just example
     * tick values to illustrate). */
    return(  MarketInfo(Symbol(), MODE_TICKVALUE)
           / MarketInfo(Symbol(), MODE_TICKSIZE) ); // Not Point.
}
 
WHRoeder:


Is this a way of automating the pip value between 2 sets of pair? I'm interested in learning more.

for instance: If I want to sell eurusd, and buy chfjpy (which at http://www.mataf.net/en/tools/01-01-correlation move together - 92% of the time on the daily charts)

and I want the loss on one of those to be offset by the profit of the other, I would like to auto calculate what the lot sizes should be.

peepingtom's post has the calculator http://www.goforex.net/pip-calculator.htm and according to that, the lot sizes should be

eurusd = 1 lot chfjpy = 0.85 lot (about)

I will be testing these number on a demo account, but would really like to know how to write a script to auto calculate these values

at the time I would like to place an order.

 
peepingtom:

You should google for a "currency map," which will tell you the correlation of the pairs. It will help you understand which pairs are likely to follow with the same/similar moves.

EUR/USD and EUR/JPY are two generally unrelated pairs, so you can't be certain both pairs will move the same direction (unless the Euro is just having a really bad day!). EUR/JPY may not move as far or as quickly as EUR/USD...you cannot expect it to behave as other currencies do. I don't know much about that pair since I only trade majors (EUR/USD, GBP/USD, USD/JPY, etc) with exception to XAU/USD (gold) and USD/DKK, which I find quite predictable and generally profitable. Anyways, if EUR/USD moves 100 pips on your suggested 1.2 lots, then yes it would be equal to the 100 pip move on 1 lot of EUR/JPY. But only if you placed the lots at those sizes. Under normal lot trading conditions you would use position sizing for each trade and just use either a percentage, ratio, etc or fixed position regardless of the currency you are trading.

I wouldn't necessarily be too focused on the numbers or differences in digits, you just need to know that every pair can have a difference in pip value. If you specifically wanted to mirror profits for each pair then you would have to do as you mentioned, change lot sizes. But in my opinion, the likelihood of two unrelated pairs making the exact same move is quite unlikely. I would be more concerned with making sure I treat each trade on different pairs individually.

I understand your bottom line but I am probably not the best expert to answer your questions as I myself occasionally ponder the same things.


If currencies that normally move in almost identical ways, move in opposite directions temporarily, it stands to reason they will move back to their normal relationship to each other... and there is an opportunity to profit. The problem is, if you don't size them correctly, you will indeed have one be a profit, and one be a loss, but if from experience, if the lot sizes are not correct, then you have an out of balance profit/loss situation... if it moves in the right direction, your profit could be huge, if it moves in the wrong direction, the other's profit will not make up for the loss... I am on a quest to find a way to find the right lots size ratios. Thanks for your help, it has been very beneficial... and any more bits of wisdom along this line would be great.

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