What are Pips in Forex Trading?
Remember there are hundreds of pairs, for example, if USDINR= 54.50 is increasing to USDINAR= 55.00 then profit is 5o paisa per dollar, it will be confusing if you tell this situation to any foreigner and what will you say if EuroUsd = 1.3050 increasing to EuroUsd=1.3100, you will have a profit of 50 cents, etc. If USDJPY=99.00 to USDJPY = 99.50. you will have no idea what the people of that country say if we say paisa the subunit of rupees, so we are confusing and foreigners are also confusing. There is a need for uniformity because every country has its own currency to understand all traders, so here introduces the concept of pip. Pip: Pip is a small change in the Quoted Currency price, it’s usually 1 basic point i.e 1/100th of 1 %. For example, USD/INR= Rs.54.52 will change after a minute to 54.53 this small change in the currency we will say that it has moved by 1 pip. If this change is decreased to 54.51 then we also say it has moved by 1 pip but here in negative and above in posi