{"id":1198,"date":"2022-05-02T04:47:59","date_gmt":"2022-05-02T02:47:59","guid":{"rendered":"https:\/\/www.onlinetradingplatforms.co.uk\/?page_id=1198"},"modified":"2022-05-02T06:46:00","modified_gmt":"2022-05-02T04:46:00","slug":"pips-and-spreads","status":"publish","type":"page","link":"https:\/\/www.onlinetradingplatforms.co.uk\/forex-trading\/pips-and-spreads\/","title":{"rendered":"Pips and Spreads"},"content":{"rendered":"

To\u00a0trade Forex successfully<\/strong>\u00a0you need to understand the basics, including the most used terms.<\/p>\n

And two of the most important words you\u2019ll hear are \u201cpips\u201d and \u201cspreads\u201d.<\/p>\n

The acronym PIP stands for Percentage In Point or Price Interest Point. In Forex trading your profits and losses are measured in pips.<\/p>\n

In simple terms\u00a0a PIP is the smallest value<\/strong>\u00a0(price) increment a currency can make.<\/p>\n

A pip is a number value. In the Forex market, the value of currency is given in pips. One pip equals 0.0001, two pips equals 0.0002, three pips equals 0.0003 and so on.<\/p>\n

List of the Best Forex trading platforms<\/h2>\n
\r\n\r\n
\r\n
\r\n
\r\n
\r\n \"Vantage <\/div>\r\n
\r\n

Vantage Fx<\/h2>\r\n
\r\n <\/i> 4.6\r\n <\/div>\r\n <\/div>\r\n
\r\n Demo account<\/span>\r\n <\/i>Yes<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit<\/span>\r\n \u00a3 150<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit: \u00a3 150\r\n <\/div>\r\n
\r\n \r\n Review<\/span>\r\n <\/a>\r\n <\/div>\r\n
\r\n \r\n Open account<\/span>\r\n <\/a>\r\n <\/div>\r\n
<\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n\r\n\r\n
\r\n
\r\n
\r\n
\r\n \"Skilling\" <\/div>\r\n
\r\n

Skilling<\/h2>\r\n
\r\n <\/i> 4.2\r\n <\/div>\r\n <\/div>\r\n
\r\n Demo account<\/span>\r\n <\/i>Yes<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit<\/span>\r\n \u00a3 180<\/span>\r\n <\/div>\r\n
\r\n Minimum Deposit: \u00a3 180\r\n <\/div>\r\n
\r\n \r\n Review<\/span>\r\n <\/a>\r\n <\/div>\r\n
\r\n \r\n Open account<\/span>\r\n <\/a>\r\n <\/div>\r\n
<\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n\r\n
\r\n
\r\n
\r\n
\r\n \"Blackbull <\/div>\r\n
\r\n

Blackbull Markets<\/h2>\r\n
\r\n <\/i> 4.5\r\n <\/div>\r\n <\/div>\r\n
\r\n Demo account<\/span>\r\n <\/i>Yes<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit<\/span>\r\n \u00a3 150<\/span>\r\n <\/div>\r\n
\r\n Minimum Deposit: \u00a3 150\r\n <\/div>\r\n
\r\n \r\n Review<\/span>\r\n <\/a>\r\n <\/div>\r\n
\r\n \r\n Open account<\/span>\r\n <\/a>\r\n <\/div>\r\n
<\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n\r\n\r\n
\r\n
\r\n
\r\n
\r\n \"avatrade\" <\/div>\r\n
\r\n

Avatrade<\/h2>\r\n
\r\n <\/i> 4.5\r\n <\/div>\r\n <\/div>\r\n
\r\n Demo account<\/span>\r\n <\/i>Yes<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit<\/span>\r\n \u00a3 150<\/span>\r\n <\/div>\r\n
\r\n Minimum Deposit: \u00a3 150\r\n <\/div>\r\n
\r\n \r\n Review<\/span>\r\n <\/a>\r\n <\/div>\r\n
\r\n \r\n Open account<\/span>\r\n <\/a>\r\n <\/div>\r\n
<\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n\r\n
\r\n
\r\n
\r\n
\r\n \"hycm <\/div>\r\n
\r\n

HYCM<\/h2>\r\n
\r\n <\/i> 5\r\n <\/div>\r\n <\/div>\r\n
\r\n Demo account<\/span>\r\n <\/i>Yes<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit<\/span>\r\n \u00a3 150<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit: \u00a3 150\r\n <\/div>\r\n
\r\n \r\n Review<\/span>\r\n <\/a>\r\n <\/div>\r\n
\r\n \r\n Open account<\/span>\r\n <\/a>\r\n <\/div>\r\n
<\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n\r\n
\r\n
\r\n
\r\n
\r\n \"Easy <\/div>\r\n
\r\n

Easy Markets<\/h2>\r\n
\r\n <\/i> 4.5\r\n <\/div>\r\n <\/div>\r\n
\r\n Demo account<\/span>\r\n <\/i>Yes<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit<\/span>\r\n \u00a3 150<\/span>\r\n <\/div>\r\n
\r\n Minimum deposit: \u00a3 150\r\n <\/div>\r\n
\r\n \r\n Review<\/span>\r\n <\/a>\r\n <\/div>\r\n
\r\n \r\n Open account<\/span>\r\n <\/a>\r\n <\/div>\r\n
<\/div>\r\n <\/div>\r\n <\/div>\r\n <\/div>\r\n\r\n<\/div>\n

Forex pips allow us to determine a rise or fall in foreign exchange values in percentage terms as an alternative of\u00a0measuring in currency terms<\/strong>.<\/p>\n

Most currencies are priced to four numbers after the point. For example, a three pip spread for EUR\/USD is 1.4502\/1.4505.<\/p>\n

However, of all the major currencies, the price of the Japanese yen does not have four numbers after the point. In an USD\/JPY spread the price is only given to two decimal points \u2013 so a quote for USD\/JPY looks like this: 114.05\/114.08. This quote has a\u00a0three pip spread<\/strong>\u00a0between the buy and sell price.<\/p>\n

An Understanding of Forex Pips and Spreads is Vital<\/h2>\n

The spread is closely associated with the pip and has a major importance for you as a trader.\u00a0Forex spreads are also measured in pips<\/strong>.<\/p>\n

The spread is the\u00a0difference between the bid price and ask price<\/strong>\u00a0(the sell quote and the buy quote) which is the major cost of currency trading. \u00a0The \u201cask\u201d is the price at which you buy and the \u201cbid\u201d is the price at which you sell.<\/p>\n

Let\u2019s look again at our example: the EUR\/USD pair is quoted at 1.4502\/1.4505, making the spread equal to three pips.<\/p>\n

First of all, the pip spread is your cost of doing business.<\/p>\n

In the case above it means you sustain a paper loss equal to 3 pips at the moment you enter the trade. Your contract has to go up 3 pips before you break even.<\/p>\n

Generally speaking, the more active and the bigger the market, the lower the pip spread. The smaller and exotic markets tend to have higher spreads. Most brokers will be offering\u00a0different spreads for different currencies<\/strong>\u00a0and smaller accounts will generally have higher spreads than bigger regular accounts.<\/p>\n

Low Spread Brokers<\/h2>\n

This means that at any given moment you can get different quotes for the same currency pair, depending on the brokers. If you care about your profit margins, it is important that you find a broker offering a\u00a0lower pip spread<\/strong>.<\/p>\n

However, the low spread is not everything. Be sure you choose a\u00a0reputable broker. Remember that this is how brokers make money.<\/p>\n

Wider spreads result in a higher ask price and a lower bid price. As a consequence, you pay more when you buy and get less when you sell, making it more difficult to\u00a0turn a profit.<\/strong><\/p>\n

Brokers don\u2019t typically earn the full spread, especially when they hedge client positions. The spread compensates the market maker for taking on risk from the time it executes a client trade to when the broker\u2019s net exposure is hedged (possibly at a different price).<\/p>\n","protected":false},"excerpt":{"rendered":"

To\u00a0trade Forex successfully\u00a0you need to understand the basics, including the most used terms. And two of the most important words you\u2019ll hear are \u201cpips\u201d and \u201cspreads\u201d. The acronym PIP stands for Percentage In Point or Price Interest Point. In Forex trading your profits and losses are measured in pips. In simple terms\u00a0a PIP is the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":1187,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"templates\/sidebar-right.php","meta":{"footnotes":""},"yoast_head":"\nPips and Spreads - Online trading platforms<\/title>\n<meta name=\"description\" content=\"The acronym PIP stands for Percentage In Point or Price Interest Point. 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