Ankit, there I meant the smallest unit of GBP, as in smallest unit of INR is paise. The move represented was 20 *1/100th of Smallest unit in GBP.
The name PIP is used for an arbitrary measure of your success or loss. The reason for using PIP as measure is cause of different loss or profit for different currency pairs.
Example for my EUR/GBP example 20 pips meant $2.93 profit.
But, had I been trading EUR/USD it would have been just $2 on the same 20 pip movement.
If I may extrapolate on my example, as there is some confusion left as to making 5% a day. Even my previous example was a bit off.
Take a $500 account. On it 2% would mean 500*0.02 = $10. So basically you are supposed to take a position such that if the trade is a loser it amounts to just $10 loss.
On a 1 lot $10 loss means 1 pip movement.
On a 1 mini lot $10 loss would mean 10 pip movement.
On a 1 microlot $10 loss would mean 100 pip movement.
(Now, if you look at the same example as above 20 pip movement against would have meant $2.93 loss on $1000 meaning a 0.3% loss, not a 3% loss. Sorry about the mistake, my trading platforms settings were set to a very conservative trade and I posted the same here without cross referencing.)
So, if I take the same trade as an example, I would have entered the trade with 1/2 a mini lot.
So,if the TP was hit, it would mean a profit of 2.93*5 = 14.65.
To achieve a target of 5% a day profit(1000*0.05 = 50), I need to take around 4-5 trades more to achieve that which is feasible if you are a full time trader.
The whole crux and the play of forex is that I dont need to depend on a single currency move to get my share of profit.(Like a 500 pip move) . I can take small 10 pip trades to achieve that.
For people confused my long talk about losses and not profits, in forex it is utmost important to control your losses and take limited profits. The leveraged nature of forex might make it easier to take huge profits but it is also means huge losses.
