Medical Book
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Medical Book

Buy Textbooks | Autoclaves | stethoscopes | Buy Books Online | Buy Medical Textbooks | Textbooks | Equipment | Nutrition | USMLE | MRCP | MRCS | Dental | Sport Medicine | Cardiology | Medical Textbook | Surgery | Pregnancy | Anatomy | Radiation | Pedia |
 
HomeLatest imagesPublicationsRegisterLog in

Share
 

 PIP Values and Spreads

View previous topic View next topic Go down 
AuthorMessage
painofhell

painofhell

Male Posts : 669
Birthday : 1990-05-18
Join date : 2014-08-16
Age : 34
Job/hobbies : forex

PIP Values and Spreads Empty
PostSubject: PIP Values and Spreads   PIP Values and Spreads Icon_minitimeThu Aug 28, 2014 1:38 pm

PIP Values and Spreads

A pip is the smallest amount that a currency value can change. If the value of the EUR/USD changes from 1.0126 to 1.0131, we say it has gone up 5 pips. Pips are basically the same thing as ticks in commodity futures. Other name of pips is called points.
All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price.

The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price in which you the trader will sell.
The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price in which you the trader will buy.

The difference between the bid and the ask price is popularly know as the spread.

The bid and ask will be changing from moment to moment as you watch the live action on a dealer platform that is connected to a live data feed, but they will always be separated by the amount of the spread.

If you were to enter a trade and then change your mind and instantly exit the trade before any changes had occurred in the bid and ask prices, the spread would be the cost of your brief trade. Most forex dealers do not charge a commission; hence this spread is how they make their money. Spread vary, from 3 for the highest volume currencies with the biggest market makers, to 6 or even more for cross rates, or when dealing with a small broker.

Share
Back to top Go down
 

PIP Values and Spreads

View previous topic View next topic Back to top 
Page 1 of 1

Permissions in this forum:You cannot reply to topics in this forum
Medical Book :: Forex :: Forex Education and Learning-