Teach me about the PIP

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Tyler19
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Teach me about the PIP

Postby Tyler19 » Sun Jun 03, 2007 11:59 pm

I bought one lot of 10k GBP/USD through EFX simulator.

it looks like its moving by 1$ "ticks" is this right?

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TheRumpledOne
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Postby TheRumpledOne » Mon Jun 04, 2007 1:34 am

Yes, a 10K minilot means each pip is a $1 move.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby brwkem » Sun Jan 20, 2008 9:22 pm

With a 10K minilot in USD/JPY how much is each pip move?

thx.

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Postby brwkem » Sun Jan 20, 2008 10:23 pm

One mini lot is 10k so does that mean that if you buy one minilot then you wouldnt be using any margin? Assuming your account had 10k in it.

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Postby hiachiever » Sun Jan 20, 2008 11:27 pm

brwkem wrote:One mini lot is 10k so does that mean that if you buy one minilot then you wouldnt be using any margin? Assuming your account had 10k in it.


Any time you take a position (buy or sell) your broker will require that you put up margin for the transaction. Technically margin isn't required to intiate a transaction but as not all traders make a profit a margin is the Brokers insurance incase things go bad.

In your example above if you bought (or sold) $10K worth of currency and your leverage at your Broker was 100:1 then you would have to put up $100 margin to cover the transaction. Now if the price goes up (if you are long) $100 you have made 100% against the margin used for that trasnaction. Conversely if it went down by $100 then you have lost 100% of the margin put. This is the double edge sword and power of leverage.

HTH.

Cheers,
Hiachiever

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