Excerpt from: Forex Training
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| August 27, 2008 | | Understanding the pip in currency trading | One of the forex trading terms you will come across a lot is "pip." It is important to understand what this term means, since it is one of the more important when interpreting currency market movements.
Pip
Pip stands for "percentage in point." This is the smallest amount a currency can move in the market. With most currencies, the pip change is seen in the fourth number of the quote. If euro/dollar is 1.4785 and changes to 1.4786, it has made a change of one pip.
The dollar/yen currency pair is the one where the quote is represented by two decimal places rather than four.
| Topic Tags: currencies, currency pair, currency trading, dollar/yen, euro/dollar, forex trading, forex trading terms, percentage in point, pip, pip currency trading | |
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