Charts and timeframes
One 60-pip move on three timeframes
| Step | Amount | Note |
|---|---|---|
| The move itself | 60 pips | EUR/USD travels from about 1.0850 to about 1.0910, a rise of 0.0060, which is 60 pips |
| Cost of one pip on one standard lot | ₦10,000 | one standard lot is 100,000 units; 100,000 x 0.0001 = 10 units of the quote currency, converted at the current rate |
| Five-minute chart | ₦600,000 | 60 pips x ₦10,000 per pip on one standard lot; the move is spread over many candles |
| One-hour chart | ₦600,000 | the same 60 pips x ₦10,000; the same money, drawn with fewer candles |
| Daily chart | ₦600,000 | the same 60 pips x ₦10,000; here it may be a single candle |
The naira figure depends on the exchange rate used to convert the quote currency, and that rate varies between brokers. Spreads, commissions and swap charges also vary between brokers, and a broker may round the pip value. The three charts show the same move, so the gross figure is identical; what changes is how often a shorter timeframe invites you to trade and pay those costs again.
The mistake people make here
The common mistake is to open a five-minute chart, see a sharp move, and take it as a signal, then hold it for days. The five-minute view is built for short holds; the daily view is built for long ones. Mixing them means your exit does not match your entry, and each extra trade adds a spread you pay whether you are right or wrong. Decide the timeframe first, then let the entry, the stop and the target all come from that same timeframe. If you cannot say how long you plan to hold, you are not ready to place the trade.Check yourself
EUR/USD moves 25 pips. On one standard lot, what is that in naira at the rate used here?
25 pips x ₦10,000 per pip = ₦250,000. The pip value assumes the conversion rate given in the example; your broker's rate may differ.
You take three trades of 20 pips each on one standard lot in a day. What is the gross figure, and why is the net figure lower?
3 x 20 pips = 60 pips. 60 x ₦10,000 = ₦600,000 gross. The net is lower because each of the three trades pays a spread, and possibly a commission, so costs are charged three times.
The same 60-pip move appears on a five-minute chart and a daily chart. Does the naira value of the move change?
No. The move is 60 pips on both, so on one standard lot it is 60 x ₦10,000 = ₦600,000 on both. Only the number of candles and the number of trading decisions change.