An Introduction to Pip In STEEM/USDT and How to Calculate

Friends here in this post you will learn about pip which we will be using our dear Steem to illustrate what pip means.

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As a crypto trader and a blogger who earns STEEM coin which is a cryptocurrency cryptocurrency like Bitcoin (BTC), Ethereum (ETH), and others, it is advisable you know how the price changes as it is paired with USDT. Let's quickly dive into what pip means.

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Pip in Crypto Trading

In crypto trading, pip is seen as the smallest possible price change that a cryptocurrency pair could make.

If you monitor a cryptocurrency that is still below $100 you will see that the price of the cryptocurrency usually moves in such a tiny increment since every currency is quoted in percentage or pip.

Typically pip is the fourth decimal point of the price of the currency which is noted as 0.0001. (The point of a piece that is equal to 1/100th of 1%).

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For example, if the STEEM/USDT price moves from 0.3024 to 0.3025 the $0.0001 in value is equal to one pips.

If the STEEM/USDT price moves from 0.3024 to ₦0.3034 it means an increase of 10 pips

If STEEM/USDT moves from 0.3034 to 0.3024 it means a decrease of 10 pips.

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How You Can Measure

Before measuring the pip it is good you know the type of size you are trading when measuring the pip for STEEM/USDT, BTC/USDT, or any other currency. Knowing the value of the pip should be a must for you.

Here, we will be using BTC/USDT to illustrate. For BTC/USDT the value for one unit is equal to $0.01. This means that for every 100,000 units, the measurements of the pip will be $1,000. For $10 it will be equal to 1,000 units, whereas $100 lots will be 10,000 units.

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Calculation of Pip using BTC/USDT pair

In a traditional market, pip value doesn't change, whereas in BTC it does as the market fluctuates. For you to calculate the pip value you have to use the formula stated below.

Pip value = One pip / Exchange rate × Lot size.

Well, the given formula is based on how many units of BTC there are in one lot. If for instance, a lot holds 10 units of BTC, the pip will be $0.10, but if one lot holds 100 units of BTC, one pip will be $1.

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With 1 BTC as your volume, one pip will be worth $0.1. For every movement, you will see a 10-pip increment. Now let's assume your pip size is 0.01, BTC price of 63,233.15 with a standard lot size, you can calculate your pip using the stated formula.

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Conclusion

_{Today, we have so far learned what pip means which is a small increment in the value of a currency. Note: this post is not investment advice, but educational content that is written to educate you about balance of power indicators.}