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What are Pips in Forex?

Time to study some mathematics, don’t worry it is not as hard as algebra but needs serious attention and concentration; it is advised to not jump in trading before knowing this. Pips in Forex is the measurement unit which is used to determine the change in values of two currencies when compared together. Other names like Pipettes or Lots also know for this trading unit. Pips in Forex are used to calculate the movement or value of currency whether trades are rising or shattering. Usually, a pip is the last digit of the price quote; a pair is compared up to the last four digits. pips forex

At FX which is a vast and giant trading market, even 1/10th value of a pip matters a lot and gets considered as pipettes. Pips are calculated as per the currency it gets used for. Every currency carries its respective value based on which the calculation of the pip takes place. The values next to the two highest numbers in the traded value can determine pipettes. After all this brief introduction, one important question which you will be thinking to ask is how to find the pip value in my account (if trading on FX), answering this question, the first thing which one has to do is to convert the given traded value in their base currency. After that multiply or divide the given pip value by the exchange rate of your quote. If found pip value and traded currencies are the same then there is nothing much to do.

2 Comments

  1. Alisha Shakya on August 5, 2019 at 7:42 AM

    Pips is the mathematical value of change in value of two currencies when compared together.

  2. Phuong Lien on January 21, 2020 at 5:23 AM

    ”Pips in Forex is the measurement unit which is used to determine the change in values of two currencies when compared together.” Its useful information!

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