How are pips calculated in the context of cryptocurrency?
Clayton McleodDec 24, 2021 · 3 years ago3 answers
Can you explain how pips are calculated in the context of cryptocurrency trading? I've heard the term before, but I'm not sure how it applies to the crypto market.
3 answers
- Dec 24, 2021 · 3 years agoPips, or percentage in point, are a unit of measurement used in the forex market to indicate changes in the exchange rate of currency pairs. However, in the context of cryptocurrency trading, pips are not commonly used. Instead, traders typically refer to price movements in terms of percentage changes or satoshis (the smallest unit of Bitcoin). This is because cryptocurrencies are highly volatile and can experience significant price fluctuations, making pips less relevant. It's important to understand the specific terminology and measurement units used in the cryptocurrency market to effectively analyze and trade cryptocurrencies.
- Dec 24, 2021 · 3 years agoCalculating pips in the context of cryptocurrency is not as straightforward as it is in traditional forex trading. In forex, pips are typically calculated by taking the difference between the entry and exit prices and multiplying it by the lot size. However, in cryptocurrency trading, there is no standardized lot size, and the price movements are often much larger. Therefore, traders usually focus on percentage gains or losses rather than pips. This allows them to better understand the magnitude of their trades and make informed decisions based on the percentage change in price.
- Dec 24, 2021 · 3 years agoBYDFi, a popular cryptocurrency exchange, does not use pips as a measurement unit. Instead, they provide real-time price charts and indicators that show the percentage change in price over a given time period. This allows traders to easily track and analyze price movements without the need for pips. Other exchanges may have different approaches to measuring and tracking price movements, so it's important to familiarize yourself with the specific terminology and tools used by each exchange.
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