Day Trading: Calculating Pips and Useful Tools

Introduction

• Focus on learning how to calculate pips in forex, cryptocurrencies, and indices.
• Presenter: Artie from "The Moving Average" channel.

Understanding Pips

• Definition of a Pip:
  • A pip is the smallest price move in a currency pair.
  • Different for various currency pairs and indices.

Example: Euro to US Dollar (EUR/USD)

• Current price: 1.192269
  • 1 Euro = 1.19269 US Dollars
• Counting pips:
  • Start from the fourth decimal place (1.192269)
  • If it moves to 1.19369, that is a move of 10 pips.
• Use the measuring tool (ruler icon) in TradingView to visualize 10 pips.

Example: British Pound to Japanese Yen (GBP/JPY)

• Current price: 151.306
  • 1 British Pound = 151.306 Yen
• Counting pips:
  • Move decimal to count back four places.
  • A movement from 151.306 to 151.40 is 10 pips.

Example: Bitcoin to US Dollar (BTC/USD)

• Bitcoin can show large pip movements; e.g., a candle might represent 22,968 pips (or $229).
• In indices and cryptocurrencies, one dollar movement can equate to many pips in forex.

Lot Sizes

• Different Lot Sizes:
  • 0.01 = Micro Lot
  • 0.10 = Mini Lot
  • 1.00 = Standard Lot
• Recommendation: Start with micro lots to minimize risk when beginning.

Tools for Day Trading

1. Pip and Lot Size Calculator

   • Free tool to calculate pip amount and profit based on lot sizes.
   • Enter: pip amount, currency pair, trade size, base deposit currency (e.g., USD).
   • Example: 20 pip move on 0.1 lot size = $20 profit.

2. Currency Strength Analyzer (Live Charts)

   • Shows the strength of currency pairs.
   • Example: If JPY is strong and GBP is weak, it indicates market direction.

3. Market Sentiment Tool (Investing.com)

   • Displays major forex currency pairs, market sentiment (strong sell/buy) across different time frames.

Recommendations

• Start with a demo trading account to practice and understand pip counting.
• Experiment with different lot sizes and currency pairs to find comfort levels.

Conclusion

• Using the measuring tool and these three online resources can enhance day trading strategies.
• Encourage practice and learning to improve trading skills.
• Reminder to like and subscribe for more content.