Basic Forex Terminologies

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  1. Hi Alwin,

    This unit brings up a question I’ve needed to ask since I’ve recently opened up an FXCM account (though I’m not trading, yet). I understand PIP being the lowest price movement and my understanding was also that most pairs, but not all were priced to 4 decimal points… the 4th decimal point being the smallest move. However, on FXCM and on your graphic above (which may be from FXCM), the price for the EUR/DOL is priced to 5 decimal points. So, here’s my question… with the price in your graph above being 1.25004 for the Buy/Bid is a move from 1.25004 to 1.25005 a pip worth $10/1/.10 (depending on the lots traded) or is it not a pip move until it goes to 1.25010?

    Thanks for the answer in advance.

    • Hi Lynndal,

      EURUSD needs to move from 1.25004 to 1.25014 to be considered a 1 pip move. As you can see, only the 3rd and 4th decimal points have the largest font as they are the main focus.

      The 5th decimal point is for added accuracy but it’s not something you need to worry.



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