Pip Value Indicator

Pip Value Indicator calculates pip value automatically and displays it in the currency chart, as well as the current candle length. Technical traders might find this tool beneficial for assisting in calculation of pip values.

What is the Pip Value Indicator?

The Pip Value Indicator is a forex trading money management tool. The indicator computes and displays the pip value of the chart currency pair. Another intriguing feature is the display of the current candle’s length in pips. As a result, the indicator assists forex traders in comprehending the pip value, allowing them to compute the lot size based on the risk. Because the calculation is independent of the chart time period, the indicator can be used on any intraday price chart. The indicator can be used by both novice and experienced forex traders, as the only data to be understood is the pips output value.

Setting up the Pip Value Indicator
Setting up the Pip Value Indicator

Pip Value Strategy

The indicator displays the output in white on the right top chart corner. It also displays the current candle length in white and updates the information in real time. PIP stands for Price Interest Point in FX trading. The lowest unit of price change in a currency pair is the PIP. Except for a few pairs, such as the Japanese Yen, most currency pairs contain four decimal places. In Japanese Yen pairings, one pip movement corresponds to a single unit price change in the fourth decimal place and a single unit decimal in the second decimal place. Many forex brokers now offer fractional pip pricing at the fifth decimal place. Most forex traders, however, utilize the PIP value as a criterion for valuation. Brokers often quote bid and ask prices to four decimal places. Spreads are calculated in PIPs and serve as the foundation for determining trading costs. The spread is the difference between the bids and the asks. Spread is commonly used by traders to assess the cost effectiveness of trading with a broker. The PIP is also used to calculate lot size, which is an essential application. Forex traders use numerous parameters to determine the appropriate size of a trading position.

To calculate risk, most forex traders use risk calculators and lot size calculators. All of these calculators, in general, require pip value to provide results. Another tool for understanding market volatility is the current candle length. As a result, a string of longer candles implies increased market volatility, requiring the technical trader to adjust accordingly.

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 Value Indicator Buy Setup
Pip Value 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 Value Indicator Sell Setup
Pip Value Indicator Sell Setup

Pip Value Pros & Cons

Pros

  • The Pip Value Indicator computes and displays the pip value of the chart currency pair and the current candle’s length in pips.
  • This indicator assists forex traders in comprehending the pip value, allowing them to compute the lot size based on the risk.

Cons

  • The Pip Value 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

In conclusion, the pip value indicator for MT4 is a useful trading tool that plays an important role in risk management calculations. It may be worth adding to your technical trading tools, it also works with different forex strategies and indicators.

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