spiffypips
Education

How to Calculate Pip Value

OANDA:AUDCAD   Australian Dollar/Canadian Dollar
Hello Traders,

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In this video I show you how to properly calculate pip value!

First you need to figure out your Stop Loss in pips.

To do so using the ATR ( Average True Range ) Indicator Watch my video on "The Best Money Manage Indicator"

After you have figured out your Stop Loss in pips you need to figure out your risk per trade. Be sure to replace 2% with whatever risk percentage you use.

Risk - 2%

Acc . Bal x 2%
10,000 x 2% (0.02) = $200

After you have figured out your Risk in a dollar amount you us the following formula to calculate your Pip Value.

Risk / 1.5 ATR

$200 (Risk) / 42 (1.5 ATR) = $4.76 (Pip Value)

You Can Keep It So It's $4.76 per Pip or, You can Round Up to $4.80 or Round Down to $4.70 That is your call.

Hope this helps!

Make It a Great Day, A Profitable Week, & Happy Trading

~ SpiffyPips ~
Thank you for posting.
I will check the ATR indicator if i can use it to my benefit for Martin trend or MMS risk management.
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spiffypips Trendbeat
@Trendbeat, I've tried the ATR with MMS for risk management. Sometimes it will push your SL past the prev. structure high/low sometimes it won't.
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Trendbeat spiffypips
@spiffypips,
Thanks for the heads up!
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spiffypips Trendbeat
@Trendbeat, Sure thing. The best thing I can say is figure out what works for you by either back testing and/or forward testing in a demo. You can send me a PM if you have any questions!
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Trendbeat spiffypips
@spiffypips,
Sure thing!
Thanks
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