Pips, Lots, Leverage & Margins

The forex world is filled with its own unique terms and concepts. Here are some of the most common you need to know:

The forex world is filled with its own unique terms and concepts. Here are some of the most common you need to know:

Pips

A pip is similar to a tick or point in stocks, futures, or other markets. It stands for percentage interest point and is the smallest individual unit of trading in forex. The pip is always the right-most digit of any forex price quote. Exactly how much an individual pip is worth depends upon the currency being traded. The Euro is measured out to four decimal places, thus each pip is equals 1/100th of a cent. The Yen, on the other hand, is measured out to two decimal places, thus one pip is one cent. That’s not to say that each pip is worth 1/100th of a cent in profit – to calculate this, we need to introduce two other terms, lots and leverage. Euro Yen

Full Report

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Andrei Knight is a highly sought-after speaker and coachfor professional traders and individual investors alike, and holds international certifications as both an NLP Practitioner, and a Professional Life Coach. He is the author of "Trading Forex for a Living", and has made frequent... More

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