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# What is Pip Value?

May 17, 2011 06:11 am
#1
Sasha User

How it is determined? I read somewhere that pip value is adjusted by the amount we invest and the leverage. It is confusing me. The previous knowledge tells me that "Pip = difference between bid price and ask price"

So please explain it to me.

May 17, 2011 06:43 am
Bee User

Pip and Pip value are not same things

Pip = smallest increment or decrement in price e.g 4th decimal place in eur/usd i.e. 0.0001 whereas 2nd place in case of jpy i.e. 0.01

Pip value Trade volume (not investment) affects the pip value. e.g trade volume of \$10k in eur/usd means pip value of \$1. Any increase or decrease in leverage will also affect pip value.

Bee There is no term like "sufficient money". So aim for a satisfied life.

May 17, 2011 07:24 am
Sasha User

Thank you bee. It was a nice explanation. Totally understand it now.

May 21, 2011 04:11 pm
Champ User

It clears some doubts from my mind too :).

Sep 05, 2011 10:34 pm

Originally posted by Champ

It clears some doubts from my mind too :).

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Apr 14, 2012 12:48 pm
mrinalini User

PIP - As it means Percentage in Point and the smallest movement in the price is known as pip and there are some brokers who deal in 5 decimals and some in 4 decimals. Also a trader chooses or determines the value of the pip according to his style and investments.

Apr 20, 2012 06:47 am
Jogi User

Originally posted by Bee

Pip and Pip value are not same things

Pip = smallest increment or decrement in price e.g 4th decimal place in eur/usd i.e. 0.0001 whereas 2nd place in case of jpy i.e. 0.01

Pip value Trade volume (not investment) affects the pip value. e.g trade volume of \$10k in eur/usd means pip value of \$1. Any increase or decrease in leverage will also affect pip value.

Nice explanation. Brief but excellent.

Apr 21, 2012 11:36 am
FXlord User

Pips (or points): A term used in the exchange market to represent the smallest increment possible exchange rate.

Apr 25, 2012 04:12 pm
mrinalini User

Originally posted by FXlord

Pips (or points): A term used in the exchange market to represent the smallest increment possible exchange rate.

Pip value is determined by the trader when they trade and they choose their pip value or lot size based on their investments and trading style and their goals and targets.

Apr 27, 2012 07:47 am
FXlord User

the value of a pip calcilated on the second currency of the pair = size position/10000, or size position/100 in case of JY

May 25, 2012 02:17 pm
CFXsignals User

Its weird that brokers consider pips to be 0.0001 of a cent movement on eur/usd, yet most trading sites take 0.001 to be a pip...  Even my platform only allows limit orders to be placed within 30 pips, or 0.003 of a cent, but I would consider that to be 3 pips.  Yet they consider their spreads to be 1-1.6 pips, yet by their platform, this should be 10-16 - no wonder its confusing - brokers can't make up their minds.