LESSON 2: KEY FOREX TERMINOLOGIES
Objectives: If you take this lesson to the end, you will: 1. Understand all the Basic Forex Terminologies. 2. Be able to utilize them. Exchange Rate/Price This is the amount of the quote currency needed for you to get one unit of the base currency. Pip A pip is the smallest unit of price for any currency pair. It is the 4 th digit after the decimal in a price. A "pip" stands for "percentage in point" or "price interest point." It is a standardized unit of measurement that represents the smallest price movement in the exchange rate of a currency pair. Most currency pairs are quoted to four or five decimal places, and the pip is typically the last decimal place in the quote. For example, if the EUR/USD currency pair moves from 1.1200 to 1.1201, it has moved one pip. Pipette The pipette is one-tenth of a pip. It is the 5 th digit after the decimal points. Lot Size Forex is traded in specific amounts called lots, which is the number of currency units you wi...