Points VS Pips - page 158
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I don't think it will surprise anyone to learn that in any digital system operating from an analogue input signal, the latter is discretised, quantised.
The quantization step is usually set based on Kotelnikov's theorem, although there are nuances. It's just a quantization step, no more or less, a purely technical parameter for digitizing analogue data. Without knowing its meaning and understanding it's impossible to digitise an analogue process. In classics, the quantization step is set along the time axis, but no one prevents you from quantizing along the ordinate axis - price (our case).
Market data is initially analogue, or at least, it was so from the beginning and for a long time before the appearance of digital exchange systems.
The golden rule when automating any activity (believe me, I'm good at it) - is to minimize any changes in the very processes of this activity, making them only when absolutely necessary, which you have to prove long and hard. If you can prove it - you will have to change the training programme for management staff, the organisation of the process itself. EVERYWHERE, in all educational institutions.
For more than a century, there is a term in the markets which is understood and used by all - Price Interest Point, referred to worldwide as Point. Usually it is the US dollar (the universal equivalent according to Bretton Woods), but in ForEx it is a cent.
Why a dollar and a cent, but not a part or some combination of the two? The point is that the notion of a penny has nothing to do with the trading process, it is just a Price Interest Point. You can translate it better, I was aiming at a large audience of schoolchildren participating in the discussion, who could become quite competitive tomorrow. Now, this very item must by definition be tangible, having a cash equivalent, the way the market has been set up for the last 100-odd years. Even if the price quantization step on exchanges will be 10^-100500, a pip will still be a point - a dollar, or a cent, depending on the leverage (interest).
Thus, we identified two necessary parameters: 1) the purely technical size of the step of price quantization from its analogue source, and 2) the point, significant for the perception of the price (by whom? - the investor). Next comes the nuances.
Warren Buffett always said: derivatives will destroy the world. Well, or something like that.
Derivatives (derivatives instruments) appeared, the people working on them (including you and me) and the tools for those people. And that is when the term Percentage Inside Point (pip) appeared. In Russian: the percentage of the point value. Nothing special, it's just - if anyone is interested in trivia
In other words, 1 pip=0.01Point. Always by definition. That's in English.
In Russian:
To summarise:
1.
This is where the detective begins. Of course, the word pip (an acronym, really) does not exist in Russian, but the abbreviation "percentage of a point" POP is quite entitled to life, albeit ridiculous.
I agree with my numerous and respected opponents that, in Russian, the term "point" must necessarily mean something minimal, uniform and indivisible.
But understand me as well - there is a % point and there is, nastily enough, a discrete point.
I don't think it will surprise anyone to learn that in any digital system operating from an analogue input signal, the latter is discretised, quantised.
The quantization step is usually set based on Kotelnikov's theorem, although there are nuances. It's just a quantization step, no more or less, a purely technical parameter for digitizing analogue data. Without knowing its meaning and understanding it's impossible to digitise an analogue process. In classics, the quantization step is set along the time axis, but no one prevents you from quantizing along the ordinate axis - price (our case).
Market data is initially analogue, or at least, it was so from the beginning and for a long time before the appearance of digital exchange systems.
The golden rule when automating any activity (believe me, I'm good at it) - is to minimize any changes in the very processes of this activity, making them only when absolutely necessary, which you have to prove long and hard. If you can prove it - you will have to change the training programme for management staff, the organisation of the process itself. EVERYWHERE, in all educational institutions.
For more than a century, there is a term in the markets which is understood and used by all - Price Interest Point, referred to worldwide as Point. Usually it is the US dollar (the universal equivalent according to Bretton Woods), but in ForEx it is a cent.
Why a dollar and a cent, but not a part or some combination of the two? The point is that the concept of a penny has nothing to do with the trading process, it is just a Price Interest Point. You can translate it better, I was aiming at a large audience of schoolchildren participating in the discussion, who could become quite competitive tomorrow. Now, this very item must by definition be tangible, having a cash equivalent, the way the market has been set up for the last 100-odd years. Even if the price quantization step on exchanges will be 10^-100500, a pip will still be a point - a dollar, or a cent, depending on the leverage (interest).
Thus, we identified two necessary parameters: 1) the purely technical size of the step of price quantization from its analogue source, and 2) the point, significant for the perception of the price (by whom? - The investor). Next comes the nuances.
Warren Buffett always said: derivatives will ruin the world. Well, or something like that.
Derivatives (derivatives instruments) appeared, the people working on them (including you and me) and the tools for those people. And that is when the term Percentage Inside Point (pip) appeared. In Russian: the percentage of the point value. Nothing special, it's just - if anyone is interested in trivia
In other words, 1 pip=0.01Point. Always by definition. That's in English.
In Russian:
To summarise:
1.
This is where the detective begins. Of course, the word pip (an acronym, really) does not exist in Russian, but the abbreviation "percentage of a point" POP is quite entitled to life, albeit ridiculous.
I agree with my numerous and respected opponents that, in Russian, the term "point" must necessarily mean something minimal, uniform and indivisible.
But understand me as well - there is a % point and there is, nastily enough, a discrete point.
...
In other words, 1 pip=0.01Point. Always by definition. That's the English way.
...
then upped the value and it became:
1 pip=0.001Point.
i.e. no definitions, including "percentage of a point" are violated
"Although beer is drunk in sips, it is quantized in bottles" ... that's an exact quote from a physics lecture by the way :-)
I'll show up in half a year and we'll talk.
then raised the value and it became:
1 pip=0.001Point
i.e. no definitions, including "percentage of a pip", are violated
Prince, your claims are not quite clear to me. What's wrong, Andrei?
Prince, your claims are incomprehensible to me. What's wrong, Andrew?
Colonel, no complaints -- I simply continued your post in the light of the current topic -- which arose after the raising of the value
then raised the value and it became:
1 pip=0.001Point
i.e. no definitions, including "percentage of a point" are violated
Prince, the percentage became a thousandth of a point.
Colonel, no hard feelings -- I simply continued your post in light of the current topic -- which came up after the upgrade
I'm a lieutenant colonel, sorry.
Prince, the percentage has become a thousandth.
The value of "percentage of a pip" has increased -- not a pip, not a pip, not a quote, not anything else -- but "percentage of a pip".
And the increase in the value of "percentage of a pip" shows that all definitions of "pip", "pip", "pattern", "tick" and all the other terms are still in place after the increase in value.