Understanding pip or point value is essential in forex trading, as it plays a pivotal role in managing your risk and estimating your potential gains or losses. The value of a pip or a point isn't static; it changes depending on the currency pair, commodities, and indices you're trading. Below, you will find a comprehensive chart detailing the pip or point value for all forex instruments, calculated based on 1 standard lot size, to guide you through this essential aspect.
How do I calculate the potential profit or loss for my trades in FundedNext?
To determine the profit or loss for a particular currency pair, commodities, indices, and cryptocurrencies, use the following formula:
Profit/Loss = Pip/Point Difference x Lot Size x Pip Value.
Example 1: Buying 1 lot EURUSD
Open Price: 1.09220
Close Price: 1.09320
Lot Size: 1 lot
Pip Difference: 10 Pips or 100 Pippetes
Profit/loss = (10 Pips x 1 Lot x $10.00) = +$100.00
Outcome: As the trader initiated a buy trade on EURUSD at an opening price of 1.09220 and closed the trade at 1.09320, the pip difference for the trade was 10 pips. In this instance, the trader would gain a profit of +$100.00 from this specific trade.
Example 2: Buying 1 lot XAUUSD
Open Price: 1892.00
Close Price: 1892.70
Lot Size: 1 lot
Pip Difference: 7 Pips or 7 Pippetes
Profit/loss = (7 Pips x 1 Lot x $10.00) = +$70.00
Outcome: As the trader initiated a buy trade on XAUUSD at an opening price of 1892.00 and closed the trade at 1892.70, the pip difference for the trade was 7 pips. In this instance, the trader would gain a profit of +$70.00 from this specific trade.
Example 3: Selling 1 lot US30
Open Price: 34567.10
Close Price: 34562.10
Lot Size: 1 lot
Point Difference: 5 Points or 50 Pips
Profit/loss = (5 Points x 1 Lot x $10.00) = +$50.00
Outcome: As the trader initiated a sell trade on US30 at an opening price of 34567.10 and closed the trade at 34562.10, the point difference for the trade was 5 points. In this instance, the trader would gain a profit of +$50.00 from this specific trade.
Example 4: Selling 1 lot BTCUSD
Open Price: 52206.10
Close Price: 52203.10
Lot Size: 1 lot
Point Difference: 30 Pips
Profit/loss = (30 Pips x 1 Lot x $0.10) = +$3.00
Outcome: As the trader initiated a sell trade on BTCUSD at an opening price of 52206.10 and closed the trade at 52203.10, the pip difference for the trade was 30 pips. In this instance, the trader would gain a profit of +$3.00 from this specific trade.
These examples are designed to provide a clear understanding of how pip values or point values impact your trading outcomes. Remember, the key to successful trading lies not just in understanding these calculations but also in applying them effectively to your trading strategy.