Pip difference calculator in Forex is a calculator that gives you the number of pips between :
- entry price and stop loss
- entry price and take profit
The pip difference calculator helps you get the number of pips from the price difference so you can easily calculate the stop loss and take profit levels on the correct distance.
Another good thing is that you can calculate pip value from the pip difference so you can see if the Risk to Reward ratio is good enough.
Read more: Risk to Reward Ratio Calculator
Pip Difference Calculator in Forex
Pip difference is the number of pips between two prices. First you calculate the price difference from the chart and then you use a pip difference calculator to get the number of pips.
With the number of pips you can calculate how much money is the difference.
How Do You Calculate Pip Difference?
Pip difference calculator use three prices:
- Entry price
- Stop loss price
- Take profit price
Calculates the difference between entry price and stop loss. This way you get a Stop loss price difference.
Then it calculates the pip difference from the price difference by checking which symbol is used.
There are few possibilities regarding symbol and those are symbol with:
- 5 decimal point
- 4 decimal point
- 3 decimal point
- 2 decimal point
5 Decimal Point
A 5 decimal point symbol is the one where the broker has defined the price of a symbol with 5 decimal points.
Check the image where you can see the price has 5 points after the decimal point.
We are using pip difference calculator in Forex where we have:
- contract size equal to 100 000 units of base currency
- pips are on the 4th decimal point
- pipette are on the 5th decimal point
Read more: Pip in Forex
Pip difference calculator will take into account that the 5 decimal point symbol has pipette on the 5th place.
Here is an example from the pip difference calculator with a 5 decimal price.
You can see when you define a symbol as 5 decimal points it will take the last digit, 5th digit, as a pipette and not as a pip. When you calculate the price difference you will also get the number of pips.
4 Decimal Point
If you select 4 decimal point symbols that will mean the last digit, on the 4th decimal place, is the pip.
When you calculate the pip difference the calculator will take into account that there are no pipettes. So the result will be in pips.
Here is an example with 4 decimal point symbols, but the price is written with 5 decimal points.
The pip difference calculator will take into account your definition that it is 4 digit and it will not count the last 5th digit. You will get a clean number of pips without pipette.
3 Decimal Point
With 3 decimal point symbols which are usually Japanese Yen pairs, you will have brokers that give you 3 decimal point charts.
The 3rd decimal point is the pipette so the pip difference calculator will take this into account and it will show you the pipette.
In this example you can see the pip difference calculator has taken only three decimal points and the last two have been removed.
2 Decimal Point
Pip difference calculator will use only 2 decimal points if you select this symbol type. These symbol types are for the pairs that have only two decimal points.
In this example you can see that the calculator has removed all 3 decimal points after the second one and took only two decimal points into count.
So, this way you do not have pipettes in the results, but only pips.
When using a pip difference calculator you need to pay attention that this calculator is for Forex and not other markets.
ANd the reason is that because the contract size in Forex is defined as 100 000 units of base currency.
If you take synthetic indices calculator where you have contract size different, like 1 units or 10 units, you will have a different pip difference when calculating price difference.