To forex traders, everything revolves around pips.
"I'm up 35 pips for the day."
"I made a 127 pip profit on my last trade."
That's great, but what's a pip?
Pip is short for "percentage in point" and you may sometimes hear people refer to pips as points.
Put simply, a pip is the smallest unit of price for a currency. It's the last decimal point in exchange rates or currency pairs.
For most currencies its 0.0001. So if you bought USD/CHF1.2475 and sold at 1.2489 you made 14 pips.
One common exception is USD/JPY. In this currency pair there are only two decimal places so a pip is equal to 0.01.
The reason pips are so important is because they are the basis for calculating profit or loss in forex trading.
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