Trading from a phone
What you learn in 3 minutesThis lesson is about the word the platform uses for the smallest price move, the pip, and what happens to that number when the chart is only six inches wide. A phone app places the same orders as a desktop terminal, but it shows you far less of the chart at once, so the size of a move matters more than the shape of it. On AUD/USD around 0.6640, one pip is 0.0001, and on one standard lot that pip is worth A$10 divided by the current rate, which is roughly A$15.06 at 0.6640.
Twenty pips on 0.10 lots of AUD/USD
| Step | Amount | Note |
|---|---|---|
| Instrument | AUD/USD | the pair used in this lesson |
| Price | 0.6640 | the level used for the conversion |
| One pip | 0.0001 | the fourth decimal place on this pair |
| Position size | 0.10 lots | one tenth of a standard lot |
| Pips moved | 20 | the distance the price travels |
| Pip value on 0.10 lots | A$1.51 | A$10 x 0.10 = A$1.00, then A$1.00 / 0.6640 = A$1.5060 |
| Result of the move | A$30.12 | A$1.5060 x 20 pips = A$30.12 |
The broker may round the pip value, charge a spread when the position opens, and add a commission or a swap if the position is held overnight. Those amounts vary between brokers, so the figure above is not the amount that lands in the account.
The mistake people make here
The common mistake is to treat the phone as a smaller version of the desktop terminal and to take a trade on the strength of the last few candles that fit on the screen. Those candles show a short distance, not the wider range the price has travelled over days. The fix is to zoom out first, note the high and the low of the past week, and only then decide whether the move you are looking at is large or small. If the screen cannot show that range, the phone is the wrong place to make the decision.Check yourself
AUD/USD is at 0.6640. One standard lot moves 15 pips in your favour. What is the result in A$?
One pip on one standard lot is A$10 / 0.6640 = A$15.06. A$15.06 x 15 pips = A$225.90.
The same 15 pips, but on 0.05 lots. What is the result in A$?
A$15.06 x 0.05 = A$0.7530 per pip. A$0.7530 x 15 pips = A$11.30.
In Australia
- Regulator
- ASIC
- Money
- A$ (AUD)
- Payment methods
- PayID, BPAY and cards
- Pip value on one standard lot of AUD/USD
- A$10 divided by the current AUD/USD rate
- Instrument in this lesson
- AUD/USD, around 0.6640