What is pip in Forex?

Pip is the abbreviation of “point in percentage”, which represents the smallest unit of change in the value of a currency pair. For most currency pairs, PIP represents the fourth decimal point of the exchange rate of the two currencies. 1pip = 0.0001 or 0.00001. Except for the currency pair USD/JPY.

For example:

The spread between 1.1960 and 1.1962 EUR/USD is 2 pips.

USD/JPY spread between 108.92 and 108.95 is 3 pip

What is lot in Forex?

LOT represents your scale in foreign exchange transactions. In another interpretation, Lot is the number of currency units you trade in foreign exchange. There are three main types of batches: standard batch (1), mini batch (0.1), and micro batch (0.01).

Standard batch: 1 standard batch is equivalent to the volume of 100,000 units

Mini batch: 1 mini batch is equivalent to the volume of 10,000 units

Micro batch: 1 Micro batch is equivalent to a volume of 1000 units.

The minimum transaction quantity for each product is 0.01 batches, limited to the number of transactions available to the customer

When you open a position, you have to determine the number of batches, each batch contains a certain number of products you want to buy or sell. That is, a lot represents the standardized quantity of a trading product, for example:

1 lot of gold is equal to 100 ounces of gold.

1 lot is 1000 barrels of oil.

A lot of currency pairs are 100,000 base currencies.

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