I am trying to sort out in my head the trading of forex
the prices are quoted to 4 decimal places, or points (or pips)
you buy with $100 or your own money which gets you $10,000 worth of currency (margin 100:1)
So for every point change of the chart you lose/earn $1
eg
entry price 1.0000
exit price 1.0010
which is 10 point profit, so you get $10 profit for your $100 buy
Is this correct?
mit
18th-August-2005, 07:14 PM
I am trying to sort out in my head the trading of forex
the prices are quoted to 4 decimal places, or points (or pips)
you buy with $100 or your own money which gets you $10,000 worth of currency (margin 100:1)
So for every point change of the chart you lose/earn $1
eg
entry price 1.0000
exit price 1.0010
which is 10 point profit, so you get $10 profit for your $100 buy
Is this correct?
Depends on your broker. With CMC you can buy any amount from minimum around $10kUSD. The pip value is dependant on the currency. If you buy 6000 GBPUSD a pip is worth around 80 cents a pip. If you buy 12000 AUDUSD then it is over $2 a pip although I haven't checked for awhile as I only tend to trade GBPUSD and the amount's vary depending on the value of the AUD against the other currencies.
I think other brokers are more straightforward but are based on contracts. One contract is worth $100kUSD and each pip is worth $10USD. Many have mini contracts worth $1USD per contract.
Note that the Yen is only two decimal points.
MIT
Smurf1976
18th-August-2005, 07:31 PM
Personally I wouldn't be using leverage anywhere near that high. You'll almost certainly blow (empty) the account, probably quite quickly.
Take a look at http://www.aussiestockforums.com/forums/showthread.php?p=17788#post17788 but read the whole lot and judge for yourself in the debate involving myself versus Coinz.
I trade forex.
mit
18th-August-2005, 07:54 PM
Yes I'll second that. Drawdowns can be bad enough only risking 2% of your capital on each trade.
MIT
(Currently in Drawdown :( )
Beachie41
26th-August-2005, 10:54 PM
I am trying to sort out in my head the trading of forex
the prices are quoted to 4 decimal places, or points (or pips)
you buy with $100 or your own money which gets you $10,000 worth of currency (margin 100:1)
So for every point change of the chart you lose/earn $1
eg
entry price 1.0000
exit price 1.0010
which is 10 point profit, so you get $10 profit for your $100 buy
Is this correct?
Graham, log onto http://fxtrade.oanda.com & read/ask ???'s on the forum http://fxtrade.oanda.com/resources/forums.shtml. A lot of of good info there. Quite a few Ozzies trading there. One being ~chaffcombe http://users.bigpond.com/morleym/
