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So let's say I go short at 108.585. Would one pip higher be 108.586? If so, how do I calculate how much that pip is worth? And thus be able to figure out if I'm risking no more than 1K.
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1 full pip short from 108.58 would take price to 108.57, the 3rd number after the decimal is the 1/10th. A standard (100,000) lot on this pair stands at $9.17.
Your risk is down to how you wish to play your strategy. If you’re computing it via your account balance, then what % of $1k does that represent??
Easy option would be to maybe determine what % of your capital base you wish to delegate to your trade first, & then maybe wrap everything else around that axis point? You can then calculate your trade expectations/stop value etc & manage the trade accordingly?
Your entry, stops & trade exit/management will revolve wholly around your strategy play. You’ll obviously employ different parameters based on the instruments current conditions (range/trend/volatility/momentum etc).
The conditions influence your game plan. Therefore the trade tools/management structures on trends will differ from those utilized for ranges etc.
Sounds like you need to run yourself thru some sort of basic FX education module or something? Piling in unprepared or even a little unsure of your bearings, will get you beat up real bad in this arena.
Why not pop along to a newbie hang out like Babypips for instance?
http://www.babypips.com/school/
They got themselves a Forex beginner education section in there, which might offer you some background/structure to assist in familiarizing yourself along the road?
Just a suggestion.