Pips

What is Pips?

It is one of the important concept in the forex market “Pips”. In the forex market, the exchange rate rises by pips and fall by pips. For most of the currencies, the pips are denoted 4 place after the decimal point. In other words, if the EUR/USD rate is 1.5220, then the number of the pip is 0. If the exchange rate was previously 1.5220 and now it rose by one pip, the exchange rate will be 1.5221. If the exchange rate is fell by 10 pips, it will be 1.5210 and so on.

Let talk about the Japanese Yen. It is different compare with other currencies. For the Japanese Yen the pip is denoted at two places after the decimal point. meaning that, if the USD/JPY is at 88.57, then the pip is equal to 7. If the exchange rate rises by 3 pips, it would be equal to 88.60 and if it decrease by 27 pips, the exchange rate will be 88.30 and so on.