Cores and spreads - The Basics Forex explained

What is a PIP?

One of FOREX terms that you come across very often since the start of your Forex career, the "PIP (s) 'date

So what exactly is a pip? The literal definition is "the percentage of". Pip is 1/100th of 1% of all spots and can also be seen as the smallest increase in price movements

The last digit of the numbers seen at the end of a Forex quote is beep.

For example :

If EUR / USD traded at 1.1324, is tweet "4". Approximately 1 hour after this currency pair traded at 1.1329, it would be a 5 pip moves, so a pip is 0.0001.

PIP is the number 4 on the right of the decimal point in all currency pairs, but couples in which the Japanese yen (JPY). The PIP JPY pairs are the second digit after the decimal point.

What is the value of a pip

PIP value varies from one currency to another depending on the relative value of two currencies in the pair and the amount of money being traded. The formula to calculate the pip value is: 1 pip (in decimal: 0.0001) divided by the current exchange rate.

The only time the PIP value is "static" is quoted in USD currency pair. Examples of such pairs are EUR / USD, CAD / USD, CHF / USD, the pip value for couples etc. shown are USD $ 10 or more and the value of 100,000 units for the regular games, $ 1 for mini-lots and $ 0.10 per micro-parts.

You do not really have to worry about all these calculations? Fortunately, these calculations almost always automatically Forex broker.

How prevalent is Forex

I'm sure he must have wondered at some point in time "how do forex brokers make money without paying fees and other charges?" Forex brokers are using the spread to make money on each transaction is entered into the network.

The spread actually refers to the amount of pips between the bid price and ASK price, shown by all Forex quotes. The BID (the price that the dealer sells) is always lower than the ASK (price you pay) and positioned so that Forex is always open with a small loss. Sure it would work in your best interest to seek intermediaries with minimal dispersion.

Spread Example: EUR / USD spread

The question is: 1.1322 to 1.1326 is offered

Spread it: 1.1326 - 1.1322 = 0.0004 or 4 cores.

he spread in this case, therefore, 4 nuclei. When you are buying or selling this pair, the broker the 4 points of the transaction for you.