Understanding Forex Pips (Part II)

By Ahmad Hassam

It is always good to be familiar how to calculate the pips in US Dollar. If the quote currency is anything other than US Dollar, the results must be converted to dollars using the current exchange rate between the quote currency and the US Dollar in order to obtain the dollar value of the pip. Lets take a few examples:

Example No 1: Lets take the currency pair USD/JPY. JPY is the quote currency here. Using our formula: Pip value for 1 standard lot of USD/JPY= 100,000 (Lot Size)*1(No of Lots)*0.01(Pip Size) = 1000.

You need to convert this pip value into USD if your account is in US Dollar. The quote currency is in Yen, so the value of 1 pip on a standard lot is also in Yen. The broker will do that for you automatically if you instruct the broker to do so.

Your profit and loss will stay in that currency you made a profit or loss in until you instruct the broker to exchange those currencies into your own base currency. However, lets do it ourselves as well.

Suppose the USD/JPY rate is 101.02. The Dollar pip value will be 1000/101.02= $ 9.89. Therefore, 1 pip is equal to $ 9.89 in the case of USD/JPY for a standard lot at the exchange rate of 101.02.

Second Example: Now consider the currency pair EUR/GBP. It is a cross currency pair. Meaning it does not involve USD on any side. Any currency pair that does not have USD in it is known as the cross currency pair. Some cross currency pairs are very important. The base currency in the currency pair EUR/GBP is Euro and the quote currency is British Pound.

Pip value for a standard lot of EUR/GBP= 100,000 (Lot Size)*1 (Number of Lots)*0.0001(Pip Size) = 10. Here, the quote currency is in British Pounds, hence the value of pip is also in Pounds.

You need the GBP/USD exchange rate in order to convert into USD. Suppose the GBP/USD exchange rate is 1.8465. Dollar pip value will be 10*1.8465=$18.46. This means that the pip value will keep on changing depending on the currency pair exchange rate.

Example No 3: Lets take the currency pair EUR/USD. Here the base currency is in USD so you wont have to make any conversions. Pip value on a standard lot=100,000(Lot Size)*1(Number of Lots)*0.0001(Pip Size) = $10 per pip.

It should be kept in mind that while the lot size, amount of lot traded and the specific currency pair traded will certainly affect the pip value, the leverage chosen by the trader whether it is 50:1, 400:1 or somewhere in between, has absolutely no bearing whatsoever on the pip value.

You must have seen many times the exchange rate expressed like 0.5678/0.5683. For example the EUR/USD exchange rate might be 0.9955/0.9959. The exchange rate for any currency pair is expressed in the form of bid/ask. The first number is the bid price that you will get from your forex broker if you sell Euros against US Dollar. The second number is the ask price also known as the offer price, the price at which the broker will sell you Euros against US Dollar.

Spread is also an important concept that you need to know. The difference between the bid and ask price is known as the spread. Spread is always expressed in pips. It may vary from broker to broker. Spread is the brokers profit and youre trading cost. Sometimes there can be slippage also. Slippage is also expressed in pips. New traders often think that the difference between the price they see on their charts and the price the broker quotes them is slippage. This is wrong. Your charting software and broker prices are two different things. - 23210

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Try These 1500 Pips A Day Forex Signals From Heaven. Know Forex Rebellion!

The Truth About Property Flipping

By Arthur Butler

Real estate is often advertised as the hot way to make quick money. While investing in property can be extremely financially rewarding, it takes hard work, patience, and perseverance to be successful.

It's easy to fall into thinking that real estate will immediately bring you financial security. The news media encourages this belief with stories about people who made it big in real estate.

The best and most important thing you can do as a real estate investor is make solid plans before your first investment.

The way home flipping is described, it sounds like all you have to do is stumble across a random house, buy it, and fix it up. In actuality, you have to put as much work into it as you would into any other job: writing a budget, making lists of the kind of investment you're looking for, and evaluating potential houses to see if they are a good fit for your plans. You are very unlikely to be successful without such a plan.

Your budget should include how much money you can afford to keep tied up in a home (you need to have adequate cash flow to pay for renovations, property managers, or other expenses) and how much time you can afford to spend dealing with this property. Sometimes a real estate investment will take up to twice as long to come to fruition as you expect, so it's important to make sure you can wait that long to see profits.

MYTH #3: You can run a real estate business by yourself.

You also need to make sure you research each property before you purchase it in order to ensure that it is a good investment.

This is also why it's important to research properties prior to purchase. Learning about the property's history, the type of neighborhood, and how costly it will be to maintain or repair will help you avoid making foolish purchases.

In order to be successful at real estate investment, you need to have a lot of patience. Real estate investment can make you a lot of money, to be sure, but like all legitimate business enterprises it takes time to establish yourself. Don't go into it expecting overnight success.

House flipping--buying low and selling high--is popular thanks to the news media. However, the entire real estate investment industry does not revolve around this practice. Many people rent out properties or convert them into bed-and-breakfasts. It is a good practice to have a back-up plan for making money off a given home in case renters aren't interested or you can't afford significant improvements.

Real estate investment can make you plenty of money. But it is not a get-rich-quick scheme or a magical cure to your economic problems. It is a job, and you have to put hard work in to get the results you want. If you plan intelligently, you can make a comfortable reward off of your understanding of the real estate market. - 23210

About the Author:

Arranging investment property loans has become increasingly difficult throughout the credit crisis, and not many are under the illusion that things will become any easier quickly. The property investment market is still a risky proposition, and proper planning needs to be undertaken.

Forex Made Easy - Helps Generate More Profits In Forex Trading

By Bart Icles

Regardless whether or not you've already heard of Forex trading and of the stories how many Forex traders became overnight millionaires from making successful deals, Forex trading still is a very risky business venture to go into that could make you lose all your money if you don't know what you're doing, if you don't have the right tools for it and if you aren't well-versed in all its aspects. In order to tip the balance in your favor, you will need to have help in the way of some Forex Made Easy guidelines as listed below.

* New and experienced Forex traders alike regular need to have some training and education on all the aspects of Forex trading before going into actual trading. It may be in the form of going to Forex classes in a school setting, or it might be through an online course from the Internet. Both options are good ones that all depends on the preference of the student/trader in regard to his needs and expectations. By being able to learn even the most basic of knowledge about Forex trading helps a lot in making more positive trade decisions and in avoiding common mistakes that lead to money losses.

* Practice constantly with paper trading to get a feel for it until you become confident enough and be ready with using the real thing. There are many excellent software programs out there that can help you do this wherein you can try out various Forex strategies and techniques and make money making transactions. Anyone has the ability to make money, as also to lose it quickly in the blink of an eye. So, to prevent this from happening to you, you need to keep practicing constantly until your efforts will become fluid and well executed. *

* Another important thing to keep in mind is to always keep a disciplined approach to Forex transactions no matter how large or small the amounts of money are involved. It?s a foregone conclusion already that 95% of traders will lose their investments and only the remaining 5% will go on to make a profit. If you happen to be on the winning side, always remember not to get cocky and complacent, for tomorrow you might be on the 95%?s side. Just stick to your plan of action and you?ll continue to stay on trading as long as it is advantageous to you.

By simply reading this Forex Made Easy guide, you will view Forex trading in a new light which will surely enable you to be more successful in your trading. If you remember at all times to follow the above guidelines and also to be in control at all times and not the other way around, you'll surely be making more and more profitable deals in the near future. - 23210

About the Author:

Managed forex accounts start with a desire to learn and a drive to become a great trader. Learning mini forex trading takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

Tax Lien Foreclosure Properties: Tips And Strategies The Successful Investor Needs To Know

By Nathan Williams

The most important thing any investor can do to take the risk out of investing is to have a solid understanding of the strategy principles, problems, and ways to effectively turn a profit. No Risk Investor provides sound education and step-by-step instruction in creative real estate investing strategies for beginners and seasoned investors alike. No Risk Investor gives members the necessary resources any investor would like to have in their arsenal in order to become successful.

Members can discuss tax lien investing subjects on our Investor Forum and even interact with other students. They can view archived training videos in the Training Center and consult the Auction Calendar in the Tax Lien Marketplace to plan their investing strategy.

Do you know how to access your County's tax lien and deed county lists? The Tax Lien Marketplace is the place where you can view and purchase pre-evaluated tax foreclosure properties from our Tax Property List. Attend County online property tax sales and much, much more through the Tax Lien Marketplace.

No Risk Investor realizes the reasons people want to learn how to invest in Tax Lien Certificates and Tax Deeds in the first place--they want to get into property. They understand that it's hard to get into that first property but also how important it is to get some real assets into your portfolio. It's not only important to create cash flow but also to acquire assets. Although it's important that you learn these steps on your own, No Risk Investor also offers pre-evaluated properties for sale. Our team of skilled investors researches and buys properties specifically to help and inform our members.

No Risk Investor will help you buy tax foreclosure properties as soon as possible. Land is available today for under $1,000 and houses for under $5,000. Our houses are given with a Warranty Deed, meaning when you buy a house you receive the deed FREE AND CLEAR. These homes are complete with a BPO and necessary information to help the investor make an educated purchase. These properties are bought through a tax deed sale and other real estate strategies and brought directly to you. Call or email us today! - 23210

About the Author:

Looking to find the best deal on Tax Lien Foreclosure Properties , then visit www.noriskinvestor.com to access the best advice on how to buyGovernment Tax Lien Foreclosure properties.

Stock Margins Can Make or Lose You A Lot of Money

By Richard Moran

You can use someone else's money to leverage your capital for stock purchases. That is buying on margin and is the same as buying other things on credit. The difference comes to the control you have over your investment - with the stock market you are at the whims of the day-to-day market fluctuations. Many of the recent financial problems drove the market down and therefore lost money for those who held their stock on margin. These circumstances left many stocks at all time slows.

Buying Stock Outright

Cash is still the best way to purchase any investment. Buying stock on margins will necessitate the price of the stock rising enough to not only cover your cost and fees, but enough to cover the interest charges imposed by the stock firm offering the margin purchase. Unless your crystal ball is a good one, and your stock picks take off, that is a lot of pressure for the stocks price to rise. Of course if the price falls you are still responsible for that loss plus any interest due on the original purchase price. You may owe quite a bit more than the stock is worth when you sell.

Buying on Margin

When you buy stocks on margin, you are requesting a loan for the money to purchase those stocks. In return for the loan from the brokerage firm, you will pay interest on that loan. The brokerage firm is virtually making money on your loan and will hold your stocks as collateral against the loan. If you do not pay the firm back, they sell the stocks. In short they have little risk involved in loaning you the money for the stocks. On the other hand, you have to see to it that the stocks you select make enough in profits to not only put money in your pocket but to pay the loan back to the brokerage firm.

Knowing the Stocks you Buy

If your interested in margins the best advice is to know your stocks. One bad bet can cost a lost of money. Conversely, it can make you a bundle. History can help with a stocks' rises and falls but circumstances of a particular day can affect a solid stock to a great extent. Think what would happen to the health insurance provider's stock if the government announced universal health care for the citizens of the United States. Everything affects the stock prices - politics, weather, the moods of the people. When a few of the banks borrowed from the government most bank stock whet down, even if they were not borrowers from the fed.

Margin/Cash - so which is the best way?

It comes down to your mindset when it comes to risk. If you will get ulcers worrying about the money you owe on margin it might be a good idea to stay out of the market all together, or buy mutual funds and let someone else worry about the return. Paying cash leaves you in a more flexible position while the margin gives you greater potential. The most important thing is to do your research and invest with your head not your heart. - 23210

About the Author:

Richard Moran is a Financial Consultant and writer for Money Helpers. The Blog contains 100's of articles, charts, and calculators to assist you in your financial well-being. All the parts of the Blog are free and it is updated on an almost daily basis. If you are looking for any financial aids or products they can be found on Money Helpers.