When it comes to trading forex, it’s important to understand how to count pips. Pips, or “percentage in points,” are the smallest unit of measurement in forex trading. They are used to measure the price movements of currency pairs and indicate the profit or loss of a trade. In this article, we will explain how to count pips in forex using crosshair in MT4.
What is Crosshair in MT4?
MT4 or MetaTrader 4 is a popular trading platform used by forex traders around the world. It provides a range of tools and features to help traders analyze the market and execute trades. One of these tools is crosshair, which is a cursor that allows you to select a specific point on a chart.
Crosshair is a useful tool for traders because it allows them to measure the distance between two points on a chart. This makes it easy to calculate the number of pips between two prices, which is essential for determining the profit or loss of a trade.
How to Use Crosshair to Count Pips in MT4?
To use crosshair to count pips in MT4, follow these simple steps:
Step 1: Open a Chart
The first step is to open a chart in MT4. To do this, go to the “File” menu and select “New Chart.” You can then select the currency pair you want to trade and the timeframe you want to use.
Step 2: Activate Crosshair
Once you have opened a chart, you need to activate crosshair. To do this, click on the “Crosshair” icon in the toolbar at the top of the chart. Alternatively, you can use the keyboard shortcut “Ctrl+F.”
Step 3: Select Two Points
To count pips, you need to select two points on the chart. These points should be the start and end points of the price movement you want to measure. To select a point, click and hold the left mouse button while moving the cursor to the desired point.
Step 4: Read the Pip Value
Once you have selected two points, the distance between them will be displayed in the crosshair. This distance is measured in pips and can be read from the “Data Window” at the bottom of the chart. The pip value will be displayed in the “Price” column.
Tips for Counting Pips in Forex
While using crosshair is an easy way to count pips in forex, there are a few tips you should keep in mind:
1. Understand the Pip Value
The value of a pip varies depending on the currency pair and the size of the trade. For example, the pip value for EUR/USD is $10 for a standard lot of 100,000 units. However, for a mini lot of 10,000 units, the pip value is $1. Understanding the pip value is essential for calculating the profit or loss of a trade.
2. Be Accurate
When using crosshair to count pips, it’s important to be as accurate as possible. This means selecting the start and end points of the price movement as precisely as possible. Even a small error can result in an inaccurate pip count.
3. Use a Pip Calculator
If you find it difficult to calculate pips manually, you can use a pip calculator. This is a tool that calculates the pip value for you based on the currency pair, trade size, and current market price.
Conclusion
Counting pips is an essential skill for forex traders. It allows them to calculate the profit or loss of a trade and make informed trading decisions. Using crosshair in MT4 is an easy and accurate way to count pips. By following the steps outlined in this article, you can use crosshair to measure the distance between two points on a chart and calculate the number of pips.
