Forex pips indicators

Forex Pips Indicators
By James Taylor

http://www.FishingForexPips.com

Copyright by James Taylor - http://www.fishingforexpips.com/ All rights reserved.

Forex pips indicators have a major speculative
role to play in the foreign exchange market.
They refer to the minute increments of a given
currency. PIP is an acronym for “percentage in
point” and forex rates are expressed up to 4
pips or 4 decimal places.


In forex trading, they represent the smallest
changes in the currency value. Even a small
change in a pip can have a heavy effect on the
final value of a particular currency upon its
purchase or sale.


Foreign exchange trading involves various
currencies with thousand dollar values, and
the slightest movements in the pip value,
whether up or down, can mean big trading
gains or losses.


This is how crucial the role that pips have in
the determination of the cost of a particular
trade. When a currency buyer quotes a bid
and the seller asks for the desired price, the
spread between the two is minimal.


For currency wholesalers, the spread is usually
1 to 2 pips. Brokers, however, will note this up
to anywhere from 3 to 20 pips. The amount
noted by the spread will be retained by the
dealers as their fees as they do not charge any
commissions for their services.


The job of the dealers is to try to predict
market movements. If they speculate right
and the spread is exceeded by the price
fluctuations, a profit will be made.


Before getting into actual trading in the
market, neophytes are advised to learn the
basics first such as what the forex markets are,
opening up an account with a broker, chart
reading, using the forex pips indicators, and
understanding the various chart patterns.


You can get a lot of information online
including how to design your own trading
system and how to test it. It is important for a
beginner to get an idea on which currencies to
buy or sell, when to trade them, and what
signals to use.


A pip can be simply stated as 1/10,000th of the
prevailing exchange rate, and the pip value of
a basic currency must be defined. It is
basically how much the pip is worth. To
compute for the pip value, multiply 1/10,000th
of the exchange rate by the lot size.


The pip is the 4th decimal place in the
exchange rate quoted. The pip will vary if a
different currency pair is quoted. The
importance of pips lies not so much in the
accurate and proper measurements of dollars
and cents but rather in indicating the rise and
fall of the foreign exchange values.


When involved in a particular currency trade,
the forex trader must try to determine the
worth of the interest point of the price by
monitoring and noting how much money is
gained or lost for each price interest point that
is gained or lost.


As an investor, it is important that you are
able to check the price movements in the
market. It can be achieved by understanding
how forex pips indicators work, and being
able to calculate the value on a particular
currency.


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Forex pips indicators

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