A pip is a minimum movement in forex. Same as a cent in most stocks, except a cent in forex is usually 100 pips. When you are trading $100k lots (most common size), a pip is $10. If the pair, EUR/USD for example, goes a full cent, that's a grand, etc. Futures currencies are different. A "pip" in futures is a "tic", and the size for most contracts is different. Usually 12.50 per tic, but Canadian and Aussie Dollar are the same size as forex.
so would you say a $100K lot in FX is equivalent to trading 1K lots in stocks? what are the execution fees like? for example, 0.5 cent rates for 1K shares of stock is like $10 for a round trip and then like a buck for SEC fees. thanks for the explanation. i think a quicker explanation of a pip is to say it is the same as a basis point.
I'm just getting started, too, but I think the broker takes the spread, so no commissions. They bet you're going to loose..... am I right?
some do but we have no proof and we'll never find out unless we're an employee or owner of a FX dealer. if you want a square deal, go FX Futures.
Why use futures instead of spot? CME electronic euro (6E) has the same 3 to 5 pips bid/ask spreads too. Is it because with futures you have a chance to buy at the bid price and sell at the ask price? Even so, spot give you a little more margin, say you make on average 10 pips less than trading futures, you might still make more money trading spot depending on how big the move is. Also, why use MA signals instead of economic reports? I looked back 2-3 weeks. It seems that the euro reacted to US economic reports pretty expectedly within 1 hours of the report. Did I not look far back enough? Anyone? Brite?
No...6E usually has a one tick spread during London and NY hours; commission is about 1/2 a tick at the worst. Cheers, TRADERguy
What is SMA? I immagen some kind of Moving Average, but what does the S stand for? What timeframe should there be on the chart for this one? thank you very much! Andy