Last updated on March 14th, 2023 at 01:24 pm
NAS100 Profit Calculator is a very important tool that every NASDAQ stock index trader should learn how to use. The trading tool is recommended to traders because it helps in forecasting the risks/loss and gain/profit.
Trading indices is a great way to get some exposure to the best performing stocks by opening a single position. You don’t need to open separate trades for making profits from the price fluctuations of different stocks but get the very same effect by choosing the right index that is composed of such top stocks that can generate profitable trades.
One such popular index you can trade is NASDAQ 100, which is popularly known as NAS100 or US100. One of the most important aspects of trading indices is counting the number of pips which is a measuring unit for price fluctuations.
With this write-up, you will get to learn about the NAS100 calculator and how to count pips on NAS100.
Table of Contents
What is NASDAQ 100?
NASDAQ 100 is one of the most traded indices on a global level. The index is made with the top 100 US company stocks with the most volume of trade in the NASDAQ stock exchange. The index is over 30 decades old as it was found in 1985.
The NAS100 index quickly became the first choice of traders because of the rapid growth rate of the listed companies. This index can be a good start for a beginner who is fairly new to trading indices.
Why Pip Value Calculations Are Important?
You might already know the relevance of pip value calculations. But let’s have a quick look at it again before getting into the details of counting pips on NAS100. The pip value will tell you how much money you will actually gain or lose in a trade when the price of a trading instrument moves.
This is important because different traders will choose different currencies as their account’s base currency and the profits or gains will be reflected in that currency. The value of 1 pip will be different for each currency and you must know it well for planning and adjusting your trades for best possible results.
The risk element of a trade will get impacted by the pip value which makes pip calculation an integral part of risk management as well.
How to Calculate Nasdaq 100 Pips in Simple Steps
Those who are into forex trading must be well-versed with the concept of pips. But for those who don’t know, pips can be defined as the smallest unit of change that can happen in the price of a trading instrument. The concept originated from forex as this is the unit of measurement for currency rate fluctuations. In most cases 1 pip is measured in the fourth decimal place of a currency pair’s price.
For example, if we take the EUR/USD pair priced at 1.0005, which then rises to 1.0006, the price change will be 1 pip. So, 1 pip is 0.0001 for all currency pairs except the ones which include Japanese Yen. For Japanese Yen pairs, the pip is measured in the 2nd decimal place making it 0.01 for 1 pip.
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Now coming back to the NASDAQ stock index, a price change of 0.1 on NAS100 is taken as 1 pip. To explain with an example, suppose the price rises from 13500.00 to 13500.10, then we can say that the index price gained 1 pip.
For trading the index, you will have to know the pip value in your trading account’s base currency as the quallent pip value will vary based on the base currency chosen by you.
This base currency can be the USD, Euro, GBP, AUD or any other currency that you fund your account with. So, the exchange rate differences happening in the currency pairs like EUR/USD, GBP/USD and AUD/USD will have an effect on the pip value.
The formula for calculation of pip value can be written as:
Pip value = 1 pip / exchange rate * lot size
How to Use a Pip Calculator as a NAS100 Calculator?
Some traders may find the pip calculations for the NAS100 index a bit confusing at first. Hence doing these calculations manually may result in errors or it would take a lot of time to figure out the correct pip values for each trade based on your lot size.
One tool that you can use to simplify the calculation process is a pip calculator that can be used as a NAS100 profit calculator. You just need to find an online pip calculator which allows you to calculate the NAS100 pip value automatically.
Using US100 calculator is quite easy when you know the values that need to be entered. First of all you have to open the pip value calculator tab on your broker website or trading platform. Make sure they do offer the NAS100 index as a trading instrument while choosing your broker. You can then choose an index in the asset class and then specify the base currency of your trading account. After that you have to choose NAS100 as your trading instrument and then enter your position size or lot size.
Then the pip calculator will function as a NAS100 calculator and will return the results within no time. Let’s look at an example to understand how to calculate NASDAQ 100 pips better.
Imagine that a trader is planning to open a position on NAS100 with 2 lots with USD as the account base currency. The trader just needs to enter the details into the pip calculator and then it will tell you the pip value as $1.00. If we change the account base currency to GBP. the pip value will change into 0.84 and for Euro the pip value will be 0.94.
Basically calculating the pip value for the NAS100 index is pretty simple for anyone when you have an online pip calculator. This way a basic pip calculator can be used as an automated NAS100 calculator for planning and executing your trades with ease.
Online pip calculator such is a basic yet the most important trading calculator for beginners as well as experienced traders. This calculator can be used for calculating the pip value for each and every instrument that you trade with including currency pairs, stocks, commodities, indices and more.
A pip calculator or NAS100 profit calculator is a must have tool for trading the NAS100 index properly. You need to have a clear idea of the index’s pip value in your base currency for calculating the potential profits and losses for a trade. To be precise about the profits, you can use a forex profit calculator as well. So, make sure you use this tool well for getting the desired trading results.
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