# Pip value



## andrew100 (22 July 2008)

Hi,

This is my first post and a total newbie. If I had $1000 to use on forex:

1. how much is a pip worth? dollar value.

2. is this enough capital to start off?

Thanks in advance

Andrew


----------



## Trembling Hand (23 July 2008)

Welcome Andrew

It depends on your broker/leverage and then ultimately the amount you put in the order ticket.

As far as $1000, yes you can trade FX with that much but not for long. Thats why your broker will be taking the other side of your trades.


----------



## tayser (23 July 2008)

You can start with $1000 quite easily.

@ 1:100, $1000 AUD will allow you to buy up to $100,000AUD worth of the currency on the left hand side of the pair and the pip value will be 10 of whatever the currency on the right hand side of the pair is (excluding JPY which will be 1000).

However if you had $1000AUD and you want to trade EUR/USD, you need to factor in the EUR/AUD exchange rate before working out your buying power:

EUR/AUD 1.6234 - this rate expresses what 1 EUR buys in AUD, we want the reverse, so you divide the rate by 1 (0.6159).

So your max buying power on EUR/USD with an account denomination in AUD with a balance of $1000 @ 1:100 leverage is 61,599 EUR/USD - this buying power transaction is handled seamlessly by the broker in each case - you just need to know what your max is, and what percentage of that max you want to open a position at (like 15% of available buying power on EUR/USD with the above figures means you'd be trading $1USD lots (10,000 EUR/USD)).

Buy 100000 AUD/USD @ .9834
Sell 100000 AUD/USD @ .9844

10 pip profit
pip value is $10USD
profit for that trade is $100USD

lot size, margin in brackets @ 1:100, pip value

1000 (~12) USD/CAD - pip value = 0.10CAD
10,000 (~120) USD/CHF - pip value = 1CHF
100,000 (1000) AUD/USD - pip value = 10USD
1,000,000 (~16,000) EUR/GBP - pip value = 100GBP
10,000,000 (100,000) AUD/NZD - pip value = 1000NZD


----------



## tayser (23 July 2008)

Before you launch into FX, I highly recommend buying this book: http://www.moneybags.com.au/default.asp?d=0&t=1&id=5016&c=0&a=74

because it explains the market mechanics very well.


----------

