PIP Values and Spreads
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Thread: PIP Values and Spreads

  1. #1
    Join Date
    Aug 2014

    Default PIP Values and Spreads

    PIP Values and Spreads

    A pip is the smallest amount that a currency value can change. If the value of the EUR/USD changes from 1.0126 to 1.0131, we say it has gone up 5 pips. Pips are basically the same thing as ticks in commodity futures. Other name of pips is called points.

    All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price.

    The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price in which you the trader will sell.

    The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price in which you the trader will buy.

    The difference between the bid and the ask price is popularly know as the spread.

    The bid and ask will be changing from moment to moment as you watch the live action on a dealer platform that is connected to a live data feed, but they will always be separated by the amount of the spread.

    If you were to enter a trade and then change your mind and instantly exit the trade before any changes had occurred in the bid and ask prices, the spread would be the cost of your brief trade. Most forex dealers do not charge a commission; hence this spread is how they make their money. Spread vary, from 3 for the highest volume currencies with the biggest market makers, to 6 or even more for cross rates, or when dealing with a small broker.

  2. #2
    Join Date
    Nov 2015


    To calculate all spendings related to spread is extremely important, but also it's important to notice how much many a trader spends on deposit commissions. FreshForex has canceled commissions on Neteller, Visa and Mastercard and this makes a big difference to my spendings. Can buy more Cristmas presents now!

  3. #3
    Join Date
    Mar 2016


    In this market place, spread is mainly considered as an important financial tool which an investor should consider when choosing a broker. in my trading career, as a scalper, I have chosen MXTrade only one pip lowest trading which is very supportive to make profit with certainly by using any kinds of trading strategies with scalping approach that brings profit in a short time.

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broker, change, color, commission, eur, eur/usd, exchange, forex, live, money, pips, spread, trader, usd

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PIP Values and Spreads