Remember Two things
1) The first Currency listed is the Base Currency
2) The value of the base Currency is Always 1
USD / Other Currency is weak
USD: Base/Quote goes up/Value Strength/Rising Quotes mean US Dolar can now buy more
Majors not Based on the US Dolar
Where USD is not based Currency, a rising quote means the USD is Weak and buy less. 3 exceptions to this rule GBP, AUD, EUR these pair
Cross Currencies
Don’t involve USD but premise same
Bid, Asks and the Spread
Forex quotes consists two sides, Bid & Ask
Bid - Base Currency ( Sell )
Ask – Base Currency ( Buy )
What is Pip: 1/100th of 1%
Base Currency (EUR) Counter Currency (USD)
EUR / USD 1.3150
Selling 1 Euro Buying 1.3150 USD
The value of the Base Currency is always Equal to 1 EUR/USD 1.3150
1 EUR = 1.3150 USD
Basic Currency EURO ▲ 1.3150 USD▼
(Strong)
The Bid is the Price at Which you Sell
The Ask is the Price at Which you Buy
EUR / USD 1.3150 / 1.3152
Bid Price / Ask Price
The difference between the Bid and Ask Price is Called the Spread
Pip Pip
EUR / USD 1.4624 / 1.4626
Sell Buy
Different between Spread 2 Pips
A Pip is the smallest amount by which a currency quote can change
All majors currencies A Pip represents the 4th digit to the right of the decimal.
For Japanese Yen, Pips refer to the second decimal point
USD / JPY 157.80 (Pip)
Spreads will vary based on the liquidity of the currency Pair
EUR / USD 1.3150 / 1.3152
Pip:
Pip is Calculate Profit and Loss
EUR / USD 1.3150
Currency prices typically moves in tiny increments called Pips
A Pip is equal to 1/100th of 1%
For Yen related pairs, A Pip refers to the Second decimal point
USD / JPY 107.82
CAD / JPY 106.15 .........Pip
EUR / USD 1.5755 EUR / JPY 1.5740
1.5745 ▼ 1.5780▲
Decries -10 Pips In cries + 40 Pips
Pip value:
It varies from currency to currency based on the relative value of the two currencies in the pair.
EUR / USD 1.5745
1.5748▲
1 Pip = $ 10 USD per 10,000 Traded
For example:
Bought € 100,000
Profit $ 30
