Working with Pips and absolute numbers
-
I always get tied up and confused when trying to calculate TP or SL based on calculation of price or pips. I never know whether I should be using price or pips in the calculation blocks.
Say for example I want to set my TP as 50% of the distance between two points on a chart. I calculate the difference between the two points as a price fraction (eg. 0.0015). How do I then calculate the TP based off this? I also want to make sure that it works with Yen pairs as well, so don't want to multiple by 10,000.
-
@JRod78
This concept of price fraction/pips is misleading. They both express distances, expressed in different units. Price fraction actually means (absolute)distance; and pips means distance in pips.
And so : price fraction=(absolute) distance=distance in pips*pips value.
TP in price fraction=0.0015/2.
TP in fixed pips=0.0015/2/pips value.