Tuesday, June 2, 2009
Forex Basic 2 Spread & Pips
1. Contact size
2. Current price
You can see spread as commission for the broker, as what they all like to claim that there is no commission for forex trading which is not true. The true statement should be there are no additional commission other then the spread.
In this case the spread is 2 pips, so if you buy and sell almost immediately you will lost 2 pip.
How much is 2 pips?
It depend on your contact size
standard contact = $100,000 = 1pip = $10
mini contact = $10,000 = 1pip = $1
micro contact = $1000 = 1pip = $0.10
Currently i only know fxcm micro which allow you to trade micro contact, for most brokerage the min is mini contact
I guess that also self explain what is pips.
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ReplyDeleteHaim Toledano