Fips – Your Ultimate Guide

What is Fips? Fips is an abbreviation for “Forex Price Interest Point.” Basically, Fips is a technical indicator that measures the advance of a particular currency’s price in relation to its closing trades.

Why Fips?

Fips is useful because it gives a more accurate picture of just how much a particular currency has increased or decreased in value during a particular time period.

For example, a currency pair with a 30 pip MA and a 5 pip Clocked Time will indicate that the currency has advanced in price by 30 pips and has grown stronger. A currency pair with a 30 pip MA and a 5 pipuned Clocked Time will indicate that the currency is much more volatile and has actually lost value, in comparison to the currency pair with a 5 pip MA.

What is represented by the MA?

Themoving average is a specific mathematical formula that producers closing prices. These mathematical models are very similar to the analytical models that fundamental analysts use to analyze the market. The master formula is extremely important though, as it represents the assessment of one currency’s strength to the other currencies.

How Moving Averages Are Calculated

The closing price of a currency pair is added up and divided by the period of the moving average. normally, the closing price of a currency pair is divided by the closing price of the last 20 candles (forex day trading), or by the closing prices of the last 5 candles (heday trading).

Final calculating the MA involves the following calculations:

The shorter the time frame, the more volatile is the average, and the more numerous the averages, the more accurate. It is therefore the easier it is to compare the closing price of one currency pair with that of another. For of example, the 5 minute and 15 minute moving averages are very different, but their similarities end there. The 5 minute moving average simply calculates the closing prices over a certain number of candles, while the one measuring the closing prices of the last 5 minutes are based on the level of volatility present in the price fluctuation during the last few minutes.

When you compare the closing prices of say, GBP/USD and EUR/USD, you will notice that they do not add up to exactly the same points. The one measuring the price fluctuations five minutes ago and the one measuring the price fluctuations one hour ago are two very different charts. The one that gives you every day’s price action would be the one that’s able to give you the most precise position and price for the currencies you follow.

The problem is that no single measure of the price is acceptable. The reason for this is that the Forex market is incredibly volatile and changes happen every minute. The very nature of this market and the ever-changing nature of the currency trades make it increasingly difficult to work with.

The benefits of the new non directional trading strategies are they allow traders to adapt to the volatile nature of the currency pairs and the prices they are exposed to every minute. This is a much preferable situation to those traders who prefer to work with a single directional trading strategy.

Of course, working with a non directional trading model is not for everyone. It requires the trader to be able to combine his or her trading plans so that they maximizes the use of non directional trading models, while still having the flexibility to maintain a disciplined trading method. In other words, by building strong discipline, the trader can reduce the risks of suffering large losses. There are traders who would be better off trading strictly using a single method that would be able to maximize their ability to generate profits, and to only include trading in the most predictable market conditions.

Having the ability to keep the trading parameters consistent lends itself well to the technical analysis theory, thins and lower your exposure to the market risks.

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