The cost of the base currency is measured by the quoted currency with certain accuracy. This accuracy or the minimum increment value of the currency price change is called a pip. For example, the cost of most currency pairs is given with an accuracy of 0.0001. But there are exceptions – these are the pairs with Yen, ie. pairs in which the quoted currency is the Japanese Yen (JPY), for example, GBPJPY (British pound / Japanese yen). 1 point in the Yen pairs equals to 0.01. It should also be noted that now in many trading terminals the value of currencies is increased by one more point (5 digits for most pairs, and 3 digits after the coma for the Yen pairs).
Currencies: Prices and the Pips
When opening a BUY position, the trader makes his/her decision
based on the exchange rate (currency price), which
provides information about the number of required units of
the quote currency to BUY one unit of base currency. In SELL
position, as well, the decision is based on the exchange rate,
which shows how many units of the quote currency you will
get when selling one unit of base currency. Certainly you
buy a pair when you predict it will appreciate and sell it,
when you think that it will depreciate. In most currency pairs
the quoted currency is USD (U.S. dollar). For example, in the
EURUSD pair the base currency is EUR, and the quoted one-
USD. But there are a few exceptions, where the base currency
is the USD - for example, USDCHF (U.S. dollar / Swiss franc).
The cost of the base currency is measured by the quoted currency with certain accuracy. This accuracy or the minimum increment value of the currency price change is called a pip. For example, the cost of most currency pairs is given with an accuracy of 0.0001. But there are exceptions – these are the pairs with Yen, ie. pairs in which the quoted currency is the Japanese Yen (JPY), for example, GBPJPY (British pound / Japanese yen). 1 point in the Yen pairs equals to 0.01. It should also be noted that now in many trading terminals the value of currencies is increased by one more point (5 digits for most pairs, and 3 digits after the coma for the Yen pairs).
The cost of the base currency is measured by the quoted currency with certain accuracy. This accuracy or the minimum increment value of the currency price change is called a pip. For example, the cost of most currency pairs is given with an accuracy of 0.0001. But there are exceptions – these are the pairs with Yen, ie. pairs in which the quoted currency is the Japanese Yen (JPY), for example, GBPJPY (British pound / Japanese yen). 1 point in the Yen pairs equals to 0.01. It should also be noted that now in many trading terminals the value of currencies is increased by one more point (5 digits for most pairs, and 3 digits after the coma for the Yen pairs).
