IG pips and points

[gtspeed]

Hi all

Anyone else get confused with pips ticks and points. On IG for fx is last number 5th that jumps about the pip or is it the 4th as is common. As watch many videos stating they get 10 pips a trade which in my head is a so gel point.

Any help on this would be great as youtube is full of videos all contradicting each other

 

[Fill_Or_Kill]

Hi all

Anyone else get confused with pips ticks and points. On IG for fx is last number 5th that jumps about the pip or is it the 4th as is common. As watch many videos stating they get 10 pips a trade which in my head is a so gel point.

Any help on this would be great as youtube is full of videos all contradicting each other

Agreed it's confusing.

A tick is always the smallest amount a market can move. A pip, in fx, by convention is normally the smallest move the futures market can make. You should note the OTC rolling spot fx market trades to another decimal point than futures. So a pip is indeed the movement of the 4th decimal place on the EUR/USD (for example, though the second decimal pt on yen pairs...).

Essentially these things are established by convention and you can't apply the same logic to each market. But, if you're looking at OTC prices quoted to a 5th decimal, the 4th decimal is a pip and the 5th is a tick. 5th decimal spreads are a relatively recent development, which is why pips are talked about in the 4th decimal.

 

[mike.]

A pip is the second last decimal in a currency pair, the last decimal ( 5th one ) is a pipette which is 10th of a pip, Pipette is not shown in jpy Quotes.

Points not pips refer to the last decimal in everything else, e.g. indices,stocks metals etc etc...

Pip stands for ether "points in percentage" or "price interest point" not sure which.

 

[ForexinDevon]

go to babypips.com it is free to learn

 

[highbury fx]

Hi all

Anyone else get confused with pips ticks and points. On IG for fx is last number 5th that jumps about the pip or is it the 4th as is common. As watch many videos stating they get 10 pips a trade which in my head is a so gel point.

Any help on this would be great as youtube is full of videos all contradicting each other

years ago we quoted fx to 4 decimal places as was the convention. Since then Electronic trading and aggregation software has led to what we now call 'fractional pricing' which is where we quote some pairs to a fraction of a pip, ie, another decimal place. As far as I've always been aware a pip a tick and a point all mean the same but the position of the pip that is used to calculate your pnl and trade size (£5 per pip for example) may vary from product to product, from big numbers like usd/jpy that are quoted to only 2 or 3 decimal places to small numbers like gbp/usd being quoted reguarly to 5 or even 6 decimal places. You must find out the value of the pip before you do the trade otherwise you could end up making 1/10th of what you're expecting, or even worse lose 10 times the amount you thought you had.

Good luck.