How Do You Read Pips for Micro Account?
A pips is the smallest price movement in the exchange rate of a forex pair, the pip is used to calculate profits & losses when trading the online market.
How to Interpret Pips When Trading Micro Lots
In a exchange rate quote the pip is the 4th decimal in the currency price quote - for example a EURUSD quote of 1.3000 if it moves to 1.3001 this is a movement of 1 pip.
Currency pair movement in forex is calculated using pips, when trading one micro lot the pip movement is equivalent to $0.1 as shown on the trading examples below:
How to Read Pip Value in a Micro Account
To calculate the profit or loss for a Micro account a trader will count the number of pips that a currency pair has moved and multiply the number of pips with $0.1. $0.1 is the pip value when trading micro lots.
1 pip is the smallest forex pair movement used when trading forex currencies.
1 pip movement when trading Micro lots is equivalent to $0.1 (1,000 units of currency * 0.0001 = $0.1 )
How to Calculate Profit and Loss in a Micro Account
Example 1: if EURUSD moves from 1.3000 to 1.3001 this is equal to 1 pip - 1 pip is the 4th decimal place in the fx quote.
The profit or loss will be:
1.3001 - 1.3000 = 1 pip
1 pip* $0.1 per pip = $0.1
Therefore, 1 pip move for micro lot is equal to $0.1 dollars
If the trade moves in direction of the trade, the trader will make a profit of $0.1 dollars. If the trade moves against the direction of the trade, the trader will make a loss of $0.1 dollars.
Example 2: for Example if EURUSD moves from 1.3000 to 1.3050 this is equivalent to 50 pips - 1 pip is the fourth decimal place in the fx quote.
The profit or loss will be:
1.3050 - 1.3000 = 50 pips
50 pip* $0.1 per pip = $5
Hence, 50 pips move for micro lot is equal to $5 dollars
If the trade moves in direction of the trade, the trader will make a profit of $5 dollars. If the trade moves against the direction of the trade, the trader will make a loss of $5 dollars.
Example 3: for Example if EURUSD moves from 1.3000 to 1.3100 this is equivalent to 100 pips - 1 pip is the fourth decimal point in the forex quote.
The profit or loss will be:
1.3100 - 1.3000 = 100 pips
100 pip* $0.1 per pip = $10
Hence, 100 pips move for micro lot is equivalent to $10 dollars
If the trade moves in direction of the trade, the trader will make a profit of $10 dollars. If the trade moves against the direction of the trade, the trader will make a loss of $10.
How to calculate Micro Account Pip Value and Profit and Loss in a Micro Account
