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A
forex Pip
A forex pip is the increment of a certain exchange rate. The forex
pip is the difference smallest decimal places of the currency pair.
For instant, you are buying a currency pair of 1.9775/1.9770. In
this example, 1 pip is 0.0001 of the price. If we buy GBP/USD at
1.9770 and sell it at 1.9798, our profit will be 1.9798-1.9770=28
pips.
The Formula
for calculating forex pip value :-
( Decimal Place / Currency exchange rate ) X Trading amount
We use USD/
JPY as an example:
( 0.01/130.46
) x USD10,000 = USD 0.77
Therefore 1 pip = USD 0.77
The currency
exchange rate is always quoted to 2 or 4 decimal places of the price,
therefore, 1 pip is either equal to 0.01 or 0.0001. Following is
a table listed the forex pip value of some commonly traded currency
pairs.
|
Pip
|
Currency
pair
|
| 0.01 |
USD
/ JPY
|
| 0.01 |
GBP
/ JPY
|
| 0.01 |
EUR
/ JPY
|
| 0.01 |
USD
/ CHF
|
| 0.0001 |
EUR
/ USD
|
| 0.0001 |
GBP
/ USD
|
| 0.0001 |
AUD
/ USD
|
| 0.0001 |
NZD
/ USD
|
| 0.0001 |
USD
/ CAD
|
Ready to earn
Forex pips? How we earn by having USD 0.77 a pip? Ok. Let's move
on to the next interesting forex tutorial. The Leverage. Forex capital
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