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The market can make three movements:
It is essential to understand what the PIPS are and, consequently, the Take-Profit and Stop-Loss values; remember always to use the stop-loss.
Take Profit and Stop Loss are beneficial to avoid being in front of the computer all day.
PIP: PIP is the abbreviation for “Percentage in Point” or “Price Interest Point”, which is an asset’s smallest numerical price movement. A good trade for a Scalper ranges from 5 to 30 PIPS in profit; of course, nobody forbids reaching 100 or more PIPS with a single trade, even for a scalper! Generally, with a minimum bet of 0.01, 12 PIPS are equivalent to € 1, and a “bet” of 0.10 is equal to € 10, up to 100.00, equal to € 10,000 for every 12 PIPS of movement.
In this case, the Swing Trader does not opt for many small entries of 12- 20 PIPS but prefers to open only one smaller position to seek a profit of 100 PIPS and up. Now, we need to figure out how to calculate our PIPS.
Let’s take the GBP/AUD trade and assume it is now worth 1.82367; after 15 minutes, its value has moved to 1.82767; how many PIPS has it moved? The answer is 40 PIPS. The calculation is very simple; the last number must be ignored, and then the calculation will be 8276-8236 = 40 PIPS of difference. A trick? Just do 276-236 = 40 PIPS as well. Since the movement is below 100 PIPS, we can even do 76-36, and here we find our 40 PIPS. Very simple! Ignore the last number and make the difference between the two values easy! I am attaching a graph that may be helpful to you.
“The secret to being successful from a trading perspective is to have an indefinite and tireless thirst for information and knowledge.”
Paul Tudor Jones
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