In trading forex, people talk about pit. So, what is the value of one pip? Now, let's calculate the value of one pip on FOREX on GBP/CHF.
Just suppose, we buy 1 lot at 2.2200 and sell at 2.2201.
When opening position we buy 100,000 GBP and sell 2.2200 * 100,000 = 222,000 CHF.
Closing position we sell 100,000 GBP and buy 2.2201 * 100,000 = 222,010 CHF.
GBP are mutually canceled and Swiss franks are remained +10 CHF, which is +10 / (the rate of USD/CHF) = +10 / 1.6010 = 6.25 USD.
Thus by earning 1 pip on 1 lot on FOREX on GBP/CHF we get profit of $6,25.
This is the value of 1 pip on GBP/CHF.
On other currencies the pip value is calculated the same way.
As, an example for beginners in this market to easily figure out pip value.
Just suppose, we buy 1 lot at 2.2200 and sell at 2.2201.
When opening position we buy 100,000 GBP and sell 2.2200 * 100,000 = 222,000 CHF.
Closing position we sell 100,000 GBP and buy 2.2201 * 100,000 = 222,010 CHF.
GBP are mutually canceled and Swiss franks are remained +10 CHF, which is +10 / (the rate of USD/CHF) = +10 / 1.6010 = 6.25 USD.
Thus by earning 1 pip on 1 lot on FOREX on GBP/CHF we get profit of $6,25.
This is the value of 1 pip on GBP/CHF.
On other currencies the pip value is calculated the same way.
As, an example for beginners in this market to easily figure out pip value.
