What is Pip?

[ewilson52]

what is a pip. and how to calculate 1 pip in real money

 

[Andy]

Please check out Forex Glossary: http://digitalcashpalace.com/forum/showthread.php/860-Forex-Glossary

Thread title has been changed to make it more relevant to the topic.

 

[Cutiekc]

To my own understanding pips is a terms which is being used to in forex trading as a value of what one can get or gets why trading though it got a full word of it perhaps our modertor already explained better.

 

[ayushsrk]

First of all to calculate the pips you need to understand what pip is actually.Pips is the smallest movement in the currency trade.Suppose you ar trading in eurusd then the buy rate is at 1.3113 and if it moves to 1.3114 then that is 1 pip movement.So pip is simply the smallest amount of movement in any currency that you are dealing with.And to calculate the price per pip you can use the calculator provided by the forex broker that you are dealing with.they provide a calculator to know everything taking from margin to swap short,swap long and other.

 

[riddick09]

Yes, PIP is very significant for trader. When traders start they trade they usually don't look at the price of a pair/currency thus they are looking or counting on the pips for their target. Usually we see great pips movement in the major pairs in forex. It is also a way to compute how much you will gain or loss when it add other factors like lot size, capital and leverage.

Usually, in a 1:1000 leverage and 0.01 lot size the equivalent of one pip to profit will be 0.01 (cent). So if you made 100 pips then you will have 1.00 or simply 1 dollar.

 

[kalpeshmkm]

For pip i can give you some information about the pip changes every second from currency pairs last digit it's called pips with single pip your profit loss will change.

 

[rexway]

Well pip is simply the the action of each price movement the rise or fall of the currency is counted in pips and also loss and gain is also counted in pips ,so that is just simply the meaning of pips .

 

[martyn]

pip is worth the difference in price from the price of the first time we open. for example if we open BUY gbp / usd at 1.1000 price, and then we close the order at the price 1.2000, then 1.1000-1.2000 = 1000 pips, so the total or difference that we get the pip pip which is 1000 points. you can correction my statement if the statement I'm wrong.

 

[riddick09]

Well, it does not only works as when you buy but also applies when you sell as your position in the market. Yet, still have the same spread here. Pip does not equal to a certain target profits or amount in earnings but it will be vary in the different factors as well like being multiplied.

 

[Markllee30]

You will get detail about forex trading in babypipes.com this site is very good fo forex learning.

 

[jackcm]

Pip is the fourth number of exchange rate (4 digits). You shouldn't care about ",". This is true to, for example, EURUSD 1.3000 and USDJPY 99.99.

 

[kaiceaziz]

From what i understand pip means point as in a basketball score. In other words, every rise in price equals one pip/point. For example you buy a usd at price 1.500 the price then rised 1.560 , then you are in 60 pips/points profit. I hope i am right.

 

[budado]

Pip is the fourth number of exchange rate (4 digits). You shouldn't care about ",". This is true to, for example, EURUSD 1.3000 and USDJPY 99.99.

What if the account that you are holding has five decimals? like 0.34567. Is the number "6" the pip? or its the "7"? To be honest my understanding is that the pips is the smallest decimals that we use. So if we have 5 decimals account then the 5th decimals is the pips and if we have four decimals account only the 4th number is the pips.

 

[jackcm]

What if the account that you are holding has five decimals? like 0.34567. Is the number "6" the pip? or its the "7"? To be honest my understanding is that the pips is the smallest decimals that we use. So if we have 5 decimals account then the 5th decimals is the pips and if we have four decimals account only the 4th number is the pips.

Fifth digit is NOT pips. For easy understanding, let's take this as example, you buy EURUSD at 1.30000 and it is now 1.30502, and thus your current P/L pips is (1.30502 - 1.30000)*10000 = 50.2 pips

I want to emphasize that no matter your trading account supports 4 digits or 5 digits, pips is based on fourth digit.

 

[barood4money]

The smallest change in the exchange rate is called pip. Most of the major currency pairs are priced to four decimal places. So the smallest change is the last decimal point.

 

[PROPENSITY100]

Fifth digit is NOT pips. For easy understanding, let's take this as example, you buy EURUSD at 1.30000 and it is now 1.30502, and thus your current P/L pips is (1.30502 - 1.30000)*10000 = 50.2 pips

I want to emphasize that no matter your trading account supports 4 digits or 5 digits, pips is based on fourth digit.

Pips is a term used often in Forex. Pips is the movement in the currency trade.Suppose we are trading in eurusd then the buy rate is at 1.3413. Now suppose if the price moves to 1.3414, then it is said to have moved one pip upwards.

 

[riddick09]

Then, he's correct in his definition of the PIP but then, never heard of like 50.2 pips it can be only 50 pips only. And it's usually in the fourth decimal point. And we have understand that pip can greatly affected by the lot size as well like if we have 1 lot size our pip can be 1 dollar to 1 pip.

 

[Pettyeve]

Pip is calculated in whole number, may be 50.2 pip will mean pipette but I'm not sure about that. The pip is a unit of profit or loss measurements used to calculate how much that the trader has made or lost in forex.

 

[kasual]

Pips is fraction of price movement. The pips value could be different depend on how high the lot traders use to trading. If traders use high lot size, mean the value per pips point will going to be high. While if traders use small lot size, per pips profit will be small.

 

[Faal]

I use pip calculation as my trading targets! I know, that’s the right path! On the other hand, I see many traders use $ size as their profit ratio, that’s not the right way of selecting trading targets!