How to calculate pips in the forex market

Currency Trading Pips and Ticks A how to calculate pips in the forex market is the smallest change of price for any Foreign Currency. The currency quotes appear as numbers with either two or four decimal places. This means that if the Foreign Currency moves up or down, the smallest move is called a “pip”.

When you trade in Forex, you monitor how the pips rise and drop and this is what determines your investment. This pair is quoted four decimal numbers after the point. A pip here is ten thousandth of a Dollar, or 0. The pip is an abbreviation of “Price Interest Point”, and this is why another name used for pips is points.

Even though a pip is only a small amount of money, because your foreign currency trading is usually a leveraged investment, a few pips can mean serious cash fluctuations. Each serious trader needs to know how to calculate the change from pips the actual sums invested, and some online Foreign currency trading agents offer such calculators in their account. An important concept that concerns pips is called The Spread. This is the pip difference between the bid price and the ask price done for the currency trading sum. When you buy Foreign Currency it costs you more than to sell it and this is the spread.

Ticks are the smallest amounts of time that exist between two currency trades. This time frame can be a short time period of a fraction of a second for major currencies, or can also be a time frame of a few hours for less popular currencies. Ticks do not happen in constant intervals, even though the charts used for technical analysis do use specific time rates such as 4 hours of 15 minutes. Watch our step by step video presentation. An introduction to the ICTS foreign currency trading platform. Forex Pivot Point Calculator Use our free Pivot Point Calculator to better understand the fluctuations of the currency market. The pivot point calculator is a simple too to use.

All you have to do is enter the opening, closing, high and low points from the previous business day and the pivot point calculator will calculate the pivot points. A pivot point is simply the point at which the current trend changes upward or downward. That is to say, if the trend had been rising, at the pivot point, the trend would now be descending. The benefit of the pivot point calculator should be obvious. Being able to see trends over time can help to more accurately predict future trends. In addition to the pivot point calculator it would serve you well to keep abreast of the latest news and world happenings to give you a fuller picture of the reasons behind the market fluctuations.

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