What is a Pip in Forex?
The prices in Forex currencies are listed in pips. Each number is a pip. For example if the price is 1.2000 and it changes to 1.2003, means it has changed for 3 pips. a) If you want to Buy the EUR/USD currency pair, means you buy Euros and sell US dollars. If the price shows 1.2210 you buy 100,000 Euro and you Sell 122,100 US dollars, or in other words you receive 122,100 US dollars for 100,000 Euros. B) If you want to Ssell the EUR/USD, meaning you Sell Euros and BUY US dollars. You buy 122,100 US dollars and sell 100,000 Euros. In other words you receive 100,000 Euro for 122,100 US dollars. The difference between the Buy (bid) and the Sell (ask) prices is referred to as the spread. For example if a buy price is 1.2210 and the sell price is 1.2207, the spread is 3 pips.
