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  • mr_forex

    “Respect yourself most of all.”Pythagorus

    by mr_forex about 5 hours ago

Pips

The pip is defined as the smallest increment a currency pair can take. For instance, for the USD/CAD pair, a pip is 0.0001. For the USD/JPY pair a pip is 0.01. A pip is also known as a point.

Recently, many Forex brokers changed their price quotes from a 4 digit quote to a 5 digits one. This practically changed the smallest increment a currency pair can move, but the pips have remained the same.

There used to be a trick that you could use with 5 digits quote to know what a pip is, but it doesn't work everytime anymore:

The trick is simple: take the exchange rate and count 5 digits backwards. For instance, today, the USD/CAD is at 1.04328 (a 5 digit quote). Count 5 digits from the first: 1, 0, 4, 3, 2. The 2 is the 5th digit in the quote and it's at the 4th position after the decimal point, so a pip for the USD/CAD is 0.0001. This is also true for the EUR/GBP, EUR/USD and a lot of other currency pairs.

For the USD/JPY it's a different story. The USD/JPY exchange rate was historically over 100 Yen for a Dollar. This is why the Pip value for the USD/JPY is 0.01. However, the USD has lost value in relation to the Yen, so it's value today stands at 86.693. Even so, a pip is still 0.01, because this used to be the place of the 5th currency in the quote. This is also true for the CHF/JPY and other currencies involving the Yen.
 
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    by forexfinancialm (Forex Financial Mex) Friday, 05 March 2010 00:24

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    by FxSignals4Free (Kamil Burzynski) Friday, 05 March 2010 00:17

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  • Looking forward to start trading in the currency market Forex. Learning about pips, lot size, and currency value.

    by henryurbano (Henry Urbano) Thursday, 04 March 2010 23:42

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  • #forex Trade 95359856 Closed EURUSD sell 1.3576 Pips: 12.1 total: 7653.4 Get profits like this! Info / charts: http://bit.ly/cBURwv

    by FxSignals4Free (Kamil Burzynski) Thursday, 04 March 2010 23:08

  • ‘Steal’ These Forex Coaching ‘Tweaks’ (3 Times)! 5,604 Pips (How Many Did You Get?): Meet the High Velocity Market... http://bit.ly/caiu1J

    by mikeboffer (mikeboffer) Thursday, 04 March 2010 22:54

  • http://bit.ly/98LCQ8 crazy results this week Me: -3.2 pips Pianosax: -171 pips Slc: +111.4 pip... http://bit.ly/cKKyTd #forex #fx #trading

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  • Pips Miner! 515% Profit In 1 Month - The Most Profitable Forex Robot.: Currently Moved To www.my4xstore.com. http://twurl.nl/4f15ee

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    by Forrest_Mars (Forex Affiliate) Thursday, 04 March 2010 21:22

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