How to calculate number of pips on metatrader 4
Here, we look at two ways to calculate the number of pips on metatrader4 or mt4 platform. I will show you two methods to calculate the number of pips, One requires you to use crosshair tool, and the other requires you to use mouse wheel or scroll wheel.
It is very important to know how to calculate pips because every position you take it has everything to do with pips. When you take a position you need to know how much you’re going to risk in terms of pips, how many pips from your entry level to the level you want to set the stop loss or take profit. How much is your risk/reward ratio, etc…
Before I show you how to calculate the number of pips on your mt4, let me quickly explain what is a pip in case you you have no idea what I am talking about.
What is a pip
As i have already explained here on the glossary post, a pio (also called “percentage in point”), in forex terms is the smallest price change in currency pair. For example, if the EUR/USD moves from 1. 12080 to 1. 12085, that would be a change of 5 pips. Most of the currency pairs are quoted out to 4 decimal places. pips are used to calculate profit and loss.
This is how you can calculate the pips between two points on the price chart of the MT4 platform:
How to calculate number of pips using Crosshair
Metatrada 4 has a tool called crosshair that is a located at the line Studies toolbar at the top. This tool is used to calculate the number of pips. See the picture below.
All you have to do is to click on it and the mouse crosshair cursor will appear on your screen: a line that connects the two points will be drawn.
Once the crosshair is on, move the crosshair cursor to the price chart where you want to start counting, left click and hold your mouse and drag the cursor to the other point while you are still holding the mouse left button when the cursor reaches the other platform
You will see three numbers at the right side of the cursor as you keep moving your mouse. The information shown in this line will be:
The first number is the number of the candlesticks or bars that are placed between the two points,
the second number is the number of pips between two points ( you have to divide it by 10 to have it in pips if currency pairs prices have 5 decimals on your platform).
The third number shows the price of the level the crosshair cursor is.
If you find this process to be a little time consuming then there is also other way you can use to calculate the number of pips:
How to calculate number of pips using Mouse scroll wheel
If your mouse has a mouse wheel then Simple click on it, the crosshair will appear.
To use this tool, you have to press the mouse wheel to turn on the crosshair cursor.
If your mouse doesn’t support this feature. The best way is to press Ctrl+f, the Crosshair tool will be activated.
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