If you’re involved in forex trading or any other type of trading that uses pips as a unit of measurement, it’s important to know how to calculate pips accurately. TradingView, a popular charting platform among traders, provides the necessary tools to calculate pips effectively. In this article, we will guide you through the process of calculating pips on TradingView.
Before diving into the calculations, let’s briefly explain what pips are. A pip stands for “percentage in point” or “price interest point” and is a standardized unit used to measure changes in currency pairs in the forex market. For most currency pairs, a pip represents the fourth decimal place, except for pairs involving the Japanese yen, where it represents the second decimal place.
Calculating Pips on TradingView
To calculate pips accurately on TradingView, you need to follow these steps:
Step 1: Select the Desired Chart
Log in to your TradingView account and choose the currency pair or instrument you want to analyze. Once you’ve selected the chart, ensure that you have the appropriate time frame displayed for your analysis.
Step 2: Enable Crosshair Mode
To measure the distance in pips, you’ll need to use the crosshair tool. Enable crosshair mode by clicking on the crosshair icon located in the top toolbar or by using the hotkey “Ctrl + C” (Windows) or “Cmd + C” (Mac).
Step 3: Determine the Reference Points
Identify two reference points on the chart between which you want to calculate the number of pips. For example, if you’re analyzing an uptrend, you can select the low point and the high point of a swing to calculate the number of pips gained.
Step 4: Measure the Distance in Pips
With crosshair mode enabled, move your cursor to the first reference point and click to mark it. Then, move the cursor to the second reference point and click again to mark it. TradingView will display the distance between the two points in pips automatically. Take note of this value for your analysis or trading strategy.
Step 5: Adjusting for Pipettes (Fractional Pips)
In some cases, you may come across fractional pips, also known as pipettes. These are smaller increments beyond the standard pip value and are indicated by an additional decimal place. If your trading strategy requires you to consider fractional pips, note the value displayed by TradingView and adjust your calculations accordingly.
Step 6: Converting Pips to Profits or Losses
Once you have calculated the number of pips gained or lost, you can convert that figure into monetary terms by considering the lot size of your trades. Different lot sizes have varying pip values. You can consult a pip value calculator or use a predefined table of pip values provided by your broker to determine the monetary value of each pip movement based on your lot size.
Calculating pips accurately is crucial for forex traders and other traders who rely on pip-based measurements. TradingView simplifies the process by providing a user-friendly interface and the necessary tools to measure distances in pips accurately. By following the steps outlined in this article, you can easily calculate pips on TradingView and incorporate this information into your trading strategies or analysis. Remember to account for fractional pips and consider lot size when converting pips into profits or losses. With this knowledge, you can make more informed trading decisions and better manage your risk in the market.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.