Point (point) forex.

The seemingly simple question "What is a Forex pip?" sometimes leads to a host of misunderstandings and additional questions, as each currency pair has its own pip value, and its size is also influenced by other factors.

Point (point) forex - sometimes also called a pip, this is the last digit in the quote of a currency pair, which characterizes the minimum possible change in the exchange rate in relation to the currencies in the currency pair.

If you look at forex quotes , you'll notice that each instrument has its own number of decimal places, but this factor is completely irrelevant; one pip will still be equal to the last digit in the entry.

For example,

AUDCAD – 1.0596. A 1-pip increase in price will result in a quote of 1.0597.

CADJPY – 92.47. In this case, the change will no longer affect the second decimal place.

Furthermore, currency pair quotes can sometimes have three or five decimal places.

Forex pip value.

When trading, keep in mind that although all trades have standard volumes measured in lots, the value of one Forex pip for each currency pair will still vary.

Therefore, when calculating, it's essential to consider which currencies make up a given currency pair. If the base currency , the value of one pip will be calculated based on the quoted currency. The more significant the quoted currency, the higher the value of our indicator.

Furthermore, don't forget the number of digits in the quote; this factor also directly affects calculations.

The pip value also directly depends on the volume of transactions. The larger the transaction volume, the higher this value.

The simplest example is the calculation for the EURUSD pair. For convenience, we'll take a transaction volume of 1 lot or 100,000 units of the base currency.

0.0001 x 100,000 = 10 US dollars.

Changing the currency pair to USDJPY

: 0.01 x 100,000 = 1,000 Japanese yen or 10.55 US dollars.

Let's try calculating for expensive currencies: EURGBP

: 0.0001 x 100,000 = 10 pounds sterling or approximately 15.15 US dollars.

As you can see, the value of a forex pip is influenced by several factors: the quoted currency, the number of digits in the quote, and the number of forex lots .