Pip Calculator Indicator

The pip calculator is an automatic risk management tool. Best suited for forex and stock traders that assess risk before making buy/sell decisions, this indicator could be worth adding to your trading arsenal. It is no gain saying that attention to risk is very important when trading the financial markets.

What is the Pip Calculator Indicator?

The Pip Calculator is a trading value indicator for MT5. It calculates the price changes per pip based on the currency of your account deposit and the projected trading lot size. In addition to technical analysis, traders ought to control risks by modifying their trading volume. During intense trading hours, it can be difficult for busy traders to compute the value per pip and alter lot sizes. If you are a regular trader, you ought to be swift in making decisions to avoid missing out on other current chances. In this context, a quick pip value calculation tool may aid in speeding up the risk calculation procedure. The Pip Calculator is appropriate for all MT5 timeframes. Furthermore, it is compatible with all forms of forex, stock, and cryptocurrency charts.

Setting up the Pip Calculator Indicator
Setting up the Pip Calculator Indicator

Pip Calculator Strategy

When you install the Pip Calculator on your MT5 platform, it begins its calculation process automatically by determining your deposit currency. The value per pip and point is then calculated using the expected trading lot size. By default, the indicator calculates the pip value using one trading lot. However, you can always change it in the indicator’s settings to reflect your expected trading volume size. One point represents the smallest changes in the exchange rate based on price movement per tick. One pip is worth ten times more than one point. Calculating the value per pip allows us to evaluate the budgeted risk associated with each trade entry. For example, let’s say your risk budget for each trade is $500 and you’re about to place a one-lot buy order on EUR/USD. If one pip of currency is worth $10, your stop-loss budget for this particular entry is $500 / $10 = 50 pips. If the trade requires more than 50 pips SL, you may have to adjust your trading lot size so that the risk does not exceed $500.

Buy Signal

This could be your checklist for a buy trade:

  • When the indicator’s information corresponds with your strategy for a long trade.

Once this event occurs:


  • You could open a buy position based on your strategy after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade based on your strategy’s exit plan.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Pip Calculator Indicator Buy Setup
Pip Calculator Indicator Buy Setup

Sell Signal

This could be your checklist for a sell trade:

  • When the indicator’s information corresponds with your strategy for a short trade.

Once this event occurs:

  • You could open a sell position based on your strategy after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade based on your strategy’s exit plan.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Pip Calculator Indicator Sell Setup
Pip Calculator Indicator Sell Setup

Pip Calculator Pros & Cons

Pros

  • The Pip Calculator Indicator allows the traders to rapidly assess how much money they are willing to risk for any given entry.
  • This indicator provides a simple explanation of pip value so that anyone can understand the data and make buy-sell decisions.

Cons

  • The Pip Calculator Indicator do not give signals for trade entries, hence the trader ought to have a strategy already.
  • This indicator may require knowledge of price action by the traders in order for them to be able to carry out their technical analysis.

Conclusion

The Pip Calculator could be your daily risk management buddy if you are an active trader who uses the MT5 platform. It allows you to rapidly assess how much money you are willing to risk for any given entry. Furthermore, the indicator provides a simple explanation of pip value so that anyone can understand the data and make buy-sell decisions. Novice traders who find it difficult to determine the pip value of multiple financial instruments at once may find this calculator incredibly useful. Furthermore, a persistent display of the pip value on the chart will serve as a constant reminder to “know your risk before you trade.”

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