FOREX Math Review

Questions From Yesterday

• Can this make me rich?

• Pips

• Math Behind Combined Problems

  • Buying power available

  • Total cash needed for transaction

  • Buying power used

  • Total cash received at sale

  • Profit percentages

• Yes, you can make a lot of money trading

• But not overnight

• And you can easily LOSE a lot of money as well.

• Just like anything else it requires a lot of learning and work to be successful.

• Also, be aware of the difference between "Rich" & Wealthy

​

​Can this make you rich?

Yes, but No

​The Best Loser Wins!

​Pips

• A "Pip" is the smallest whole unit change a Currency Pair can make

• If you look at a traditional currency pair quote, the smallest change it can make is the last digit

• A different term like this is needed because of the very small changes involved

• High: 1.0799

• Low: 1.0709

• A difference of only
  0.009 or 90 pips

​

​EUR/USD

2/5/23

• $10 on a Standard Lot (100,000 x .0001)

• $1 on a Mini Lot (10,000 x .0001)

• 10 Cents on a Micro Lot (1,000 x .0001)

• A penny on a Nano Lot (100 x .0001)

If 1 Pip is a change of .0001 then each pip is a profit of:

Pips to Profits

​Example
a 18 pip gain on a standard lot would be a profit of $180

Multiple Choice

If a price quote is 1.8743 which number represents the "pip" digit?

• 8

• 7

• 4

• 3

Multiple Choice

If a price quote is 105.94 which number represents the "pip" digit?

• 1

• 0

• 5

• 9

• 4

Fill in the Blank

What is the difference in pips between these two prices?

Price 1: 1.3980

Price 2: 1.3965

Fill in the Blank

What is the difference in pips between these two prices?

Price 1: 1.875

Price 2: 1.793

Fill in the Blank

What is the difference in pips between these two prices?

Price 1: 128.63

Price 2: 128.40

Fill in the Blank

How much cash profit would you make on a 23 pip gain on a standard lot?

Fill in the Blank

How much cash profit would you make on a 23 pip gain on a standard lot?

General Review Questions

Multiple Choice

EURJPY 125.93/98

Which currency would you be buying with this quote?

• EUR

• JPY

Multiple Choice

CHFUSD 1.3943/48

Which currency would you be paying with this quote?

• CHF

• USD

Fill in the Blank

NZDUSD 1.3155/59

How much would you pay for each New Zealand Dollar?

Fill in the Blank

GBPUSD 1.3155/59

How much USD would you receive for each British Pound?

Fill in the Blank

CADUSD 1.1546/49

How many US Dollars would you spend to buy 50,000 Canadian Dollars?

(without using margin)

Fill in the Blank

CADUSD 1.0321/25

How many US Dollars would you receive if you sold 150,000 Canadian Dollars?

(without using margin)

Fill in the Blank

USDJPY 126.87/95

How many Japanese Yen would you spend to buy 20,000 US Dollars?

(without using margin)

Fill in the Blank

Account Cash Balance: $500

Margin Requirement: 50:1

How much buying power do you have?

Fill in the Blank

Account Cash Balance: $1,200

Margin Requirement: 100:1

How much buying power do you have?

Fill in the Blank

Account Cash Balance: $200

Margin Requirement: 50:1

You purchase 5,000 GBP when the quote is GBPUSD 1.4237/41

How much buying power do you use?

(Round to the nearest penny)

Fill in the Blank

If you make a profit of $45 using an investment of $90 (considering margin)

What is the return percentage on your transaction? (profit %)

Any other questions?

​What's next:

• Today:

  • Forex Math Quiz in Canvas

• Tomorrow:

  • Candlestick Charts

  • Open House