What Is Pip In Forex Trading?

Discussion in 'For novice traders' started by Tengkorakfx, Sep 17, 2017.

  1. Tengkorakfx

    Tengkorakfx Member

    Pips is a unit of calculation used by Forex traders to calculate the profit or loss of the transactions they make.

    If you take a look at the quote currency starting from the point (.) and count 4 digits, then 4th place is the pips value in the offer.

    For example, when the currency pair moves from 1.4020 to 1.4025, then it moves 5 pips. And, if one pip has a value of $10 for 1 trading lot, then the profit is $50.

    To calculate the pip value, the trader usually uses the following pip formula: Price requested for currency trading divided by 1 pip multiplied by the trade value. This result gives the value of pip amounts obtained or lost in trade.
     
  2. andengireng

    andengireng Member

    Pips is the price movement, One of the new unique concepts will be known when learning forex is about pips. Pip is an abbreviation of Price Interest Point, the unit to measure exchange rate changes between two currencies. Traders often use "pips" to show how much profit is gained or loss experienced. For example, "Just profit 100 pips" or "It's 20 pips loss".
     
  3. Tengkorakfx

    Tengkorakfx Member

    That's also right, we will know about how much we gain the profit with only see the pips. All trader wanna get pips as much as possible so they will get the pofit. The way is improving their skill in trading forex.
     
  4. Roman Rias

    Roman Rias Member

    These are very common things and you need to understand them very early. Once we have clear awareness about these things then only we will be able to perform and able to achieve worthy results.
     
  5. Pip is basically the digit that we see on the markets. The 4th digit is called Pip while 5th one is called Pipette, so there is really nothing complicated or extra special thing required to understand it.
     
  6. ibm'73

    ibm'73 Active Member

    The most common currency rise is called Pip. If EUR / USD moves from 1.1607 towards 1.1608, it's called ONE PIP. One pip is in the last decimal of a fraction. The pip is the way you measure your profits and losses.
     
    Nia likes this.
  7. Tengkorakfx

    Tengkorakfx Member

    ONce we know about pips and how it works on currency trading, we can measure the size of our trading plan, entry point, SL and TP points. After that, measure the size of lot that you're about to trade. Make sure the risk is not more than 2% of your capital...
     
  8. andengireng

    andengireng Member

    Pip stands for Price Interest Point, which is a unit unit to measure changes in exchange rates between two currencies. In plural English terms, "Pip" becomes "Pips". For a currency whose value is displayed in four decimal places, one pip = 0.0001
     
  9. Tengkorakfx

    Tengkorakfx Member

    Yes, and even in some brokers that has 5 decimal digits, the fifth one after the 'Pip' itself is called 'point' (plural: 'points'). So it means a pip consist of 10 points in a 5 digit trading account...
     
  10. NewbieTrader

    NewbieTrader Member

    I do like the term "pip as digit". it is more understandable. I guess it's just to make it easier for us to say it instead of "o point o o o o o something" :D that being said, i didn't know until a little later that it stands for price interest point.
     
  11. andengireng

    andengireng Member

    As a trader, we should say it "pips" and I think it is much easier, pip is the smallest movement of the price, 1 pip mean 1 point in 4 digit broker, and 1 pip mean 10 point in 5 digits broker. Correct me if I'm wrong, thank you.
     
  12. broforex

    broforex Member

    Yes, I agree with you. The most common currency increase is called Pip. One pip is at the last decimal of a fraction. The pip is the way you measure your profits and losses.
     

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