How to Choose the Best Pip Calculator
The pip calculator is a tool that an increasing number of traders have taken for granted and may not even have been aware of until now, but which can serve as a source of valuable information that they can use to make their trades more profitable.
This online tool allows traders to determine the value of a single pip of a currency pair, which can be expressed as either the base currency or the quote currency. While it may be fairly easy to determine the value of one pip for currency pair in which the greenback is the quote currency, it becomes more difficult when considering more exotic currency pairs like the EUR/CHF. In this case, the pip calculator can become a valuable trading tool since it offers you valuable information that might help improve your trading.
The way a pip value calculator works is that you pick the currency pair whose pip value you want determined, as well as the account currency, from a drop-down menu. In some cases, if the currency pair is not the USD, you may also have to provide the ask price to compute the pip value.
By knowing the value of a single pip, you can determine how much you may be paying to your broker in the form of the spreads they impose. You can also do a quick computation as to how much you could potentially lose in a trade based on the number of pips lost. Pip value calculators can be found in virtually any forex broker’s site, as part of the value added services they offer to their clients.
While one pip calculator works the same as another, there are some considerations to keep in mind that may add to the convenience of using a particular one.
- The pip calculator should be able to provide calculations for as many currency pairs as possible. One of the main values of this online tool is to determine single pip values of currency pairs that may not be as frequently encountered in trading.
- The calculator should not require you to type in the ask price. The best online pip value calculator tools have access to a price feed so that it can provide the ask price, making it more convenient to use.
- Make sure that it is accurate. You can do this by using two calculators and cross checking them to see if they provide the same results.
- The calculator should allow you to compute the values of various pip sizes, rather than just one. This increases its flexibility and utility since it allows you to compute the value of, for example, 10 pips without having to do a separate calculation to get the results you want.
- It offers a range of other online tools. You may need to use other tools rather than just the pip value calculator and it would be easier if all the tools you need are already available on one site rather than having to navigate to another site.
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