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Pips Trading – What Is a Pip?

A pip, which is generally known as a percentage in point is one of the most recognized terms in the world of financial trading. This represents the smallest incremental movement in the price of the value of an instrument. Depending on the instrument which is being traded the pip location varies. In Forex trading and to use the USD which is the most quoted currency within the markets the pip is located to the 4th decimal place $0.0001. 

Each move that takes places in USD related currency pairs will be the equivalent of the following. If the market moves from $0.0001 to $0.0002 that will be a 1 pip move. To $0.0010 will be a 10 pip move. $0.0100 will be a 100 pip move and so on.

Below we look at how the pip can be found on the trading platform and its general uses.

How is a pip used?

The pip is the main metric traders use in calculating their profit or losses. The pip number also helps a trader outline the cost of the trade prior to entering the market.

On your trading platform you will usually have a market watch which shows you the various markets being traded. On the market watch, you will see the prices being quoted, and will notice at latter numbers are usually the pips.

Best Brokers for Tight Pip Spreads

The best brokers for tight pip spreads are usually those who allow scalping, have a range of liquidity providers, good execution speeds and generally reliable. Trading volatile markets can be risky and expensive, so brokers would need to offer the above and more, to help ease your mind when trading with them at the best cost.

Here is our list of the best brokers for breakout trading:

1
Min. Deposit
$200
Exclusive promotion
Our score
10
Leverage
30:1
New accounts
Spreads
1
PIPs
Regulations
CySEC, FCA
Forex Pairs
No Fee
Start Trading
Pros:
Join the Social Trading revolution. Connect with other traders, discuss trading strategies, and use our patented CopyTrader
eToro is the world’s leading social trading platform, offering a wide array of tools to invest in the capital markets
Largest number of currency pairs to trade
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
Leverage
500:1
New accounts
Spreads
0.8
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
55+ currency pairs available
Trade on a trusted platform
24/7 support via live chats, email or phone call
Payment Methods
Credit Card, Debit Card, Visa, Bitcoin
Full regulations list:
LonghornFX offers high-leverage trading on a wide variety of assets. Trading with leverage carries a degree of risk which may result in losing more than your investments. Clients should practise risk management to protect themselves from losing more than they can afford when trading with leverage.
3
Min. Deposit
$200
Exclusive promotion
Our score
8.7
Leverage
500:1
New accounts
Spreads
0.5
PIPs
Regulations
FSPR, FMA New Zealand
Forex Pairs
27+
No Fee
Start Trading
Pros:
BlackBull Markets’ unique feature lies in its stated goal of delivering an “institutional” trading experience to retail clients
No-Dealing Desk Broker (NDD), with Straight Through Processing (STP) all done on a true ECN
State of the art Equinix servers, based in New York (NY4), London (LD5) and Tokyo (TY3)
Payment Methods
Mastercard, Visa, Bank Transfer, Neteller, Skrill, UnionPay, FasaPay
Full regulations list:
FSPR, FMA New Zealand
4
Min. Deposit
$10
Exclusive promotion
Our score
8.5
Leverage
500:1
New accounts
Spreads
0.7
PIPs
Regulations
Forex Pairs
55+
No Fee
Start Trading
Pros:
Can fund with BTC
64 global companies including Netflix and Amazon
Free deposits and withdrawals
Payment Methods
Credit Card, Debit Card, Bitcoin, Wire Transfer
Full regulations list:
EagleFX offers leveraged trading on a range of assets within its platform. CFD and Spot Forex trading do carry a degree of risk which may result in you losing more than your initial investment. Please ensure you fully understand the risks involved with leveraged trading and ensure this is not detrimental to your personal or institution's financial well being.
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