Pips Explained
Posted on August 17th, 2010 by admin
This is a guest post by Forex BulletProof
Some brokers are now beginning to quote the other major currencies to five decimal places. Logically this should mean that one pip would be 0.00001 currency units, but the potential there for misunderstanding is huge, if a pip would be worth 10 times as much with some brokers than with others. Most traders record their profit and loss in foreign exchange trading pips as well as in money. This enables easy comparison of one trade with another so you can guage a system. It also means that traders can debate their ends up in a forex forum without revealing the scale of their account or their profits in bucks and cents.