Trading GBP/USD.

GBP/USD is traded in amounts denominated in GBP.

Standard lot sizes are 100,000 GBP and mini lot sizes are 10,000 GBP.

The pip value, which is denominated in U.S. dollars, is calculated by dividing 1 pip of GBP/USD (for GBP/USD, this is 0.0001) by GBPUSD’s spot rate.

Profit and loss are denominated in U.S. dollars.

For one standard lot position size, each pip movement is worth 10 USD.

For one mini lot position size, each pip movement is worth 1 USD.

Margin calculations are based on U.S. dollars.

For example, if the current GBP/USD rate is 1.5000 and the leverage is 100:1, 1,500 USD is needed in available margin to be able to trade one standard lot of 100,000 GBP.

Take note, a higher GBP/USD sport rate requires more USD in available margin, while a lower rate would need less USD for margin.

GBP/USD Trade Tactics

One way to trade GBP pairs is to take note of when key reports come out. GBP pairs tend to react more strongly to economic reports.

For example, if U.K. GDP figures were to come in much better than expected, it could lead to a massive rally in the GBP.

Even if you were to enter late, you could still grab a bunch of pips because GBP pairs really move a lot.

Be careful though – GBP/USD and GBP/JPY pairs are the most volatile among the majors.

In fact, GBPUSD moves around 160 pips per day on average.

Because the GBP is so volatile, you might want to set wider stop loss orders to withstand all the strong moves in the market.

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