Online Investing: Forex is all a matter of pips

When it comes to forex trading you need to know the pips. In the currency market, each pip equivalent to one hundredth of a percentage point.
A pip is the lowest increase that can be recorded in price movement.
To know the actual profit or loss of a Forex transaction is necessary to calculate the value of one pip and to know the amount of the spread of the broker that we are using.
It 's very important to know this value because we peremette positioned correctly on the forex market orders (stop loss, target, take profit, c ...).
Let's see how to calculate pips of our operations:
When an order is executed, the broker immediately withdraw its gain which is calculated on the difference between the value of the bid and ask price.
If for instance the following EUR / USD is quoted bid 1.3000 ask 1.3003 means that the spread is 3 pips.
For each open operation on that cross, the broker will withdraw your capital from the pip value multiplied by 3.
If for every whole lot on that cross the pip value is 5, will be taken from 10 (2 x 5).
Calculating the value of pips for the net profit or loss.
To see our available balance we must make a very simple calculation: (Initial capital - required margin - + pip spread) the total of this operation will give us the exact value of the profit or loss.

Calculation of pips for positioning the take profit and stop loss.
Knowing the value of each pip of an increase or decrease in the value of the listing is essential to enter the operational levels of our strategy.
Taking advantage of a rising trend we have an open buy (long) assuming that the stock value of the cross walk from X to X + 1 value at a given time interval.
Basically we assume to earn the trend corresponding to a total value of each pip by the number of pips of variation. Exemplifying in numbers, if our task EUR / USD is 1.3000 and 1.3005 quotasse after a certain period, with an operation by a whole lot of our income is 25 (5 for 5 for each pip pips).
Based on these calculations we know the value of the pips, then we put in our orders on the operating platform.
Place a take profit target, or a 10 or 20 points away from the value of the listing of entry means that the gain has to stop at that level regardless of the length of the trend.
In contrast, I am entering a loss, if the trend has changed the trend, the transaction will close automatically and allow us to reduce losses.
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