Daily Trade – September 10, 2021

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Daily Trade – September 10, 2021

Forex-Smart-Trade-Best-Online-Currency-Trading-Course-Today’s-Trade-Results

How to Trade Forex?: What Is a Pip?

Interested in learning more about how to trade forex? Check out Forex Smart Trade.

Pip is an abbreviation for “percentage in point” or “price interest point.”  Based on forex convention, a pip refers to the slightest price changes that an exchange rate makes.  The pip change is the last fourth decimal point of the currency pair and is equivalent to one-hundredth part of 1% or one basis point.

For example, the slightest price move the currency pair USD/CAD can make is $0.0001 or one basis point.

Important points:

  • Forex currency pairs are quoted as pips where the bid-ask spread is measured in Pip or percentage in point.
  • A pip is 1/100th part of one percent or the fourth decimal point (0.0001).

How does the Pip work?

A pip is a basic part of the forex trading market. To simply quote it, traders sell or buy a currency that is quoted against another currency. Forex currency pairs help to spread the exchange rates through the bid-ask spread.

The exchange rate movement is measured in terms of pips. Usually, currency pairs are quoted up to four accurate decimal points. The smallest price movement for the currency pairs is one Pip or 0.0001. The pip value can be measured by 0.0001 by the exchange rate or by dividing 1/10,000.

Pip refers to the spread between the bid and ask price of the currency pair. It will also help you to estimate the gain or loss through a trade. For instance, a trader who wishes to buy the USD/CAD currency pair means he would be selling Canadian dollars in exchange for US dollars or vice versa.

How is the value of a pip estimated?  Japanese yen (JPY) is an exception.  JPY pairs (for example, EUR/JPY and USD/JPY) are quoted to only two decimal points.  For these currency pairs, the Pip refers to the 1/100 divided by the exchange rate. For instance, EUR/JPY is quoted as 132.62.

Learn How To Trade Forex

If you’d like to earn extra income trading on the Forex market, consider learning how to currency trade with Forex Smart Trade.   With their super-accurate proprietary trading tools and best-in-the-business, personalized one-on-one training, you’ll be successful.  Check out the Forex Smart Trade webinar that shows one of their trader’s trading and how easy, intuitive, and accurate the tools are.  Or try the Forex Smart Trade 30-day introductory trial for just ONE dollar.

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How to Trade Forex