What is Pipsize?

• 09/07/2021 at 9:21 PM #176971
  Nicolas56

  Problem solved.

  Actually, PRT seems to make a distinction between :

  – PipSize, which is the “point” as per contract specification

  – TickSize, which is the minimal increment in price.

  In the case of EUR/USD and BTC/USD with IG Markets, PipSize = 10 * TickSize.

  Nicolas

   

  

  Nicolas56

  Participant

  Topics: 0

  Replies: 11

  Been thanked: 2 times
  09/09/2021 at 5:59 PM #177159
  PeterSt

  Problem solved ?
  1st attachment is PRT-IB. 2nd is PRT-IG.

  

  PeterSt

  Participant

  Topics: 72

  Replies: 2333

  Been thanked: 701 times
  09/12/2021 at 2:23 PM #177313
  Nicolas56

  @PeterSt, what is the issue?

  

  Nicolas56

  Participant

  Topics: 0

  Replies: 11

  Been thanked: 2 times
  07/10/2022 at 3:22 PM #197080
  Jerome888

  Hi,

  I am lost. How to calcuate then the size of your position with all these pipsize etc… ?

  For stock market, easy

  myPositionSize = ((myInitialCapital + STRATEGYPROFIT) *(myRisk/100))/(myStopFactor*myATR))

  But for the forex ? e.g. EUS/USD, what would be the formula of myPositionSize including these variables ?

  once myTickSize=0.00001
  once myPipSize=PIPSIZE
  once myPipValue= PIPVALUE
  once myLotSize=1000 (1000 ??? mentioned by default in probacktests)

  Thank you

  

  Jerome888

  Participant

  Topics: 21

  Replies: 90

  Been thanked: 3 times
  07/10/2022 at 3:58 PM #197083
  robertogozzi

  PIPSIZE should be used when you need to deal with both PRICE and PIPS in the same expression. It relieves you of having do do conversions yourself, as the system will take care of it.
  IF you want to exit at, say 20 pips less than current LOW, you will have to convert 20 (which is a numeric value) to a price, writing:

  SELL AT Low - 20*PipSize STOP //or LIMIT

  1	SELL AT Low - 20*PipSize STOP   //or LIMIT

  because writing:

  SELL AT Low - 20 STOP //or LIMIT

  1	SELL AT Low - 20 STOP   //or LIMIT

  would work for all instruments and assets with a price to pip ratio of 1:1, like indeces, but would fail for currencies (it would subract 20 from 1.01 on fx pair EurUsd).

  It should also be used with a division when you have to convert a price into pips:

  StopLossPIPS = (close - low) / PipSize //in EurUsd this will return 40, instead of 0.0040

  1	StopLossPIPS = (close - low) / PipSize  //in EurUsd this will return 40, instead of 0.0040

  This code works fine with DAX (Daily chart), without using PIPSIZE; you cannot trade the sime size of CONTRACTS as you do with SHARES, though:

  DefParam CumulateOrders = False ONCE P = 100 ONCE minLots = 1 ONCE myInitialCapital = 10000 ONCE myRisk = 5 ONCE myStopFactor = 1 //what is this ??? myATR = averagetruerange[14](close) myPositionSize = max(minLots,((myInitialCapital + STRATEGYPROFIT) *(myRisk/100))/(myStopFactor*myATR)) IF Not OnMarket THEN IF close CROSSES OVER average[P,0](close) THEN BUY myPositionSize CONTRACTS AT MARKET ELSIF close CROSSES UNDER average[P,0](close) THEN SELLSHORT myPositionSize CONTRACTS AT MARKET ENDIF ENDIF SET TARGET pPROFIT 500 SET STOP pLOSS 200 graph myPositionSize

  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

  DefParam CumulateOrders = False ONCE P                = 100 ONCE minLots          = 1 ONCE myInitialCapital = 10000 ONCE myRisk           = 5 ONCE myStopFactor     = 1      //what is this ??? myATR           = averagetruerange[14](close) myPositionSize = max(minLots,((myInitialCapital + STRATEGYPROFIT) *(myRisk/100))/(myStopFactor*myATR)) IF Not OnMarket THEN    IF close CROSSES OVER average[P,0](close) THEN       BUY myPositionSize CONTRACTS AT MARKET    ELSIF close CROSSES UNDER average[P,0](close) THEN       SELLSHORT myPositionSize CONTRACTS AT MARKET    ENDIF ENDIF SET TARGET pPROFIT 500 SET STOP   pLOSS   200 graph myPositionSize

  

  robertogozzi

  Moderator

  Topics: 69

  Replies: 16517

  Been thanked: 3663 times
  07/10/2022 at 4:18 PM #197084
  Jerome888

  Thanks a lot Roberto I think this is what I am looking for.

  So I assume  that for currencies, I would just need to add /PIPSIZE at the end to get the right position size.

  myPositionSize = max(minLots,((myInitialCapital + STRATEGYPROFIT) *(myRisk/100))/(myStopFactor*myATR)/PIPSIZE)

   

   

  

  Jerome888

  Participant

  Topics: 21

  Replies: 90

  Been thanked: 3 times
  07/10/2022 at 10:54 PM #197097
  robertogozzi

  Yes, that’s correct.

   

  

  robertogozzi

  Moderator

  Topics: 69

  Replies: 16517

  Been thanked: 3663 times
  07/11/2022 at 3:14 AM #197100
  Jerome888

  Thank you Roberto.

   

  Could you please explain me what is this LotSize in yellow (see attached)? is that 1000 for EUR/USD ?

  Should not we consider that LotSize in the formula ?

  myPositionSize = max(minLots,( (myInitialCapital + STRATEGYPROFIT) *(myRisk/100))/(myStopFactor*myATR)/PIPSIZE/LotSize)

  or am I completely wrong ? 🙂

   

  

  Jerome888

  Participant

  Topics: 21

  Replies: 90

  Been thanked: 3 times
  07/11/2022 at 9:36 AM #197107
  robertogozzi

  I don’t know, as I never used it.

  It’s not requested by IG (for CFDs), it is requested by PRT (Futures), instead.

  I have no idea what’s it all about.

   

  

  robertogozzi

  Moderator

  Topics: 69

  Replies: 16517

  Been thanked: 3663 times
  07/12/2022 at 2:47 AM #197152
  Jerome888

  OK Thank you Roberto

   

  BTW I have made some simulations, I think PIPSIZE should be placed here to get the right position size

  myPositionSize = PIPSIZE  * (myInitialCapital + STRATEGYPROFIT) *(myRisk/100)/(myStopFactor*myATR)

   

  

  Jerome888

  Participant

  Topics: 21

  Replies: 90

  Been thanked: 3 times
  07/12/2022 at 7:32 AM #197158
  robertogozzi

  Multiplying by PipSize is used to convert Pips into Price.

  I can’t spot any value expressed in pips in your code, though.

   

  

  robertogozzi

  Moderator

  Topics: 69

  Replies: 16517

  Been thanked: 3663 times
  07/12/2022 at 8:14 AM #197162
  Jerome888

  If i take a risk of 50 eur

  With a stop at 5 pips

  The initial formula gives

  Positionsize = 50/0.0005 = 100 000

  If the. i do BUY 100 000 he will buy 100 000 K so 100 000 000.

  So i thought to come back to an “acceptable” position size i needed to divide multiply by pipsize which is 0.0001

  Is it a mistake ?

  

  Jerome888

  Participant

  Topics: 21

  Replies: 90

  Been thanked: 3 times
  07/12/2022 at 8:16 AM #197163
  Jerome888

  Again :

   

  If i take a risk of 50 eur

  With a stop at 5 pips

  The initial formula gives

  Positionsize = 50/0.0005 = 100 000

  Then BUY 100 000 would buy 100 000 K so 100 000 000…

  So i thought to come back to an “acceptable” position size i needed to multiply by pipsize which is 0.0001

  Is it a mistake ?

  

  Jerome888

  Participant

  Topics: 21

  Replies: 90

  Been thanked: 3 times
  07/12/2022 at 10:23 AM #197168
  robertogozzi

  PipSize is NOT meant to make thing “acceptable” of “most favourable” or the like. It’s meant to convert Pips into Price and viceversa.

  Anyway, if your formula yields what you expect, then it must be ok!

   

  

  robertogozzi

  Moderator

  Topics: 69

  Replies: 16517

  Been thanked: 3663 times
  07/12/2022 at 7:12 PM #197189
  Jerome888

  😀

  Sorry,  you know I am french and my English is…frenchy

  I meant “Consistent” instead of “acceptable” 😀

  i.e. the losses are indeed 50 Eur in backtests so consistent withe the risk I defined initially.

  I just hope this formula is then applicable to any forex pair.

  Thank you Roberto for all your support.

  

  Jerome888

  Participant

  Topics: 21

  Replies: 90

  Been thanked: 3 times
• Author
  Posts