The first thing that a novice trader finds unusual when initially using the MetaTrader 4 platform is calculating pip values and converting them to dollars. In general, we gauge performance in terms of percentage gains or cash. Here’s what you need to know about counting pips on MT4:
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How to Read Pips on MT4
PIP, also known as percentage interest point or price interest, is a unit of measurement for currency movement that represents the least amount of price growth for a particular pair. One pip, for example, is equal to 0.0001 for the GBPUSD or EURUSD. However, one pip is equal to 0.01 for JPY pairs.
You must keep in mind that one pip on EURUSD, EURNZD, and USDMXN is equal to a price difference of 0.0001 points. Therefore, a one pip gain would occur if the EURUSD, EURNZD, or USDMXN price rose from 1.3001 to 1.3002.
These figures differ slightly for JPY, GBPJPY, crypto, gold, and a few others. You must keep in mind that one pip on these currency pairs equals a 0.01 change in price. Therefore, the price increase from 156.32 to 156.33 if there is a one pip difference.
Pip Value = (One Pip/Exchange Rate) x Lot Size
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What Is One Pip Change in MT4?
A pip is an actual hundredth of one percent (1/100 x 0.01), which is found at the fourth decimal point (0.0001). One basis point is equivalent to one pip. A forex quote's bid-ask spread is expressed in pip units.
How to Calculate Pips in MetaTrader 4
You must keep in mind that one pip is equal to 0.0001 for significant pairs and to 0.01 for yen pairings when calculating pips on the MT4 app or MetaTrader 4 desktop. Furthermore, you need this platform to view the incremental value when live trading for a different MT4 asset.
The pips across two points on MetaTrader 4's platform price chart can be determined in the following manner:
Method One:
Place a horizontal line at the top level and another at the bottom level. Then, measure the distance between the two lines by subtracting the value of the lower line from the position of the upper line.
This slightly more difficult and time-consuming method can be used on MT4 as well as platforms without any tools for pip computation.
Method Two:
MT4 offers a tool that is quick and simple to use. To activate the crosshair cursor and use this tool, you must press the mouse wheel. We are accustomed to scrolling up and down web pages with the mouse wheel. The page scrolls up when we move the mouse wheel forward and down when we move the mouse wheel back. However, the mouse wheel also has another purpose:
Press the mouse wheel while hovering the cursor on the MT4 price chart. The mouse crosshair cursor should show on the chart once you hear a click.
If your mouse doesn't allow this function, don't worry. Another method for switching the mouse crosshair pointer on the price chart is as follows: On the Line Studies toolbar, there is a "Crosshair" feature at the top. Simply click it to bring up the mouse crosshair cursor.
Once the crosshair is active, bring the cursor to one of the chart's points, press and hold the mouse's left button, and then drag the cursor to the other point while continuing to hold the left button.
Three numbers will show at the right of the cursor. The start and end positions of the crosshair movement you just made are represented by the first number, which is the number of bars or candlesticks that are positioned in between them. Furthermore, the second number represents the disparity in points between the two price tiers. The crosshair cursor's price is displayed in the third number.
How to Count Pips in MT4
All you need to do is add a pip counter. You can add a free indicator to your price chart if you want a pip counter indicator to tally your open position pips in MetaTrader 4. You can download a pip counter indicator for free.
Additionally, you can also count pips manually; however, this is slightly more complicated and time-consuming. As long as you are familiar with how to read pips and what the change in one pip is for a particular currency pair, you will easily be able to manually count pips.
However, we recommend using a calculator or automatic pip counter to ensure accuracy and to save you time, energy, and stress.
On MetaTrader 4, unlike most trading platforms, it is relatively simple to count the pip distance between any two positions on the price chart. When you want to establish the target orders and stop loss, you need to be able to count pips. You have to know the pip distance between your entry level and the level where you want to place your stop loss, for example.
Final Thoughts
How much one pip movement is worth in the required currency is undoubtedly one of the most frequent queries that every seasoned MT4 user will ask. The fact of the matter is that any deal on foreign exchange markets still relies heavily on understanding how much one pip or one point changes a currency.
You won't be able to determine the risk to reward if you don't know this parameter. Therefore, the two approaches mentioned above are the simplest and most well-liked among traders on foreign exchange markets if you need to calculate pip value on MT4.
