Hello dear fellow traders, I have a question and hopefully somebody will be able to answer.
why is 0.0001 EURUSD’s pip location?
why is 0.01 USDJPY’s pip location?
why is 0.01 Gold’s pip location
and why is 0.001 silver’s pip location
how do you calculate those numbers? It seems copper’s pip location is 0.0005
please help, and thanks in advance.
Hi, what do you mean by pip LOCATION? What is your defenition of location?
I assume that you would like to know why the EURUSD moves with steps of minimal 0.0001 and the USDJPY with just 0.01. This is because of the price difference. Brokers determine that minimal price movement for you. E.g. Some forex brokers are ‘4digit’ with movements of 0.0001 and some are ‘5digit’ with movements of 0.00001 on EURUSD. The minimal movement of a price is a fixed number and is not calculated.
Hope this helps! :23:
Well you should ask the brokers. These choices were made for the specific product. I can think of a lenghty explenation but the short version is that this was agreed.
With regards to the silver pip. The same applies for the EURUSD. The pip is 0.0001, but you can trade 0.00001. However, the pip is and stays the 4th digit. The 5 digit is just some extra accuracy given to the traders to trade on, but the 4th pip is still the pip value. This does also apply to silver (third digit is pip, fourth digit is fractional).
I blame all those laboratory technicians, myself, for bringing their pipettes into our industry …
LOCATION?? we don’t understand with your word.
Hmmm…
Maybe yes, you are right sir. It seems he is not from west person, so its english not well enough.
Using 4 digit broker and 5 digits broker is same, i’ve using 4 digit broker such as in newforex,liteforex,mayzus broker,fbs, and roboforex
I think what he tried to ask is why those decimal should be use on 2 decimals on gold, 4 decimals point on EURUSD and so on. It is all because of those maths calculation that decide where those decimals are.
For instance, a single lot of EURUSD cost USD 10. You won’t put it on 3rd decimals as calculation because every single lot order are in a sum of 100k. Hence, by calculating the 4th decimals changes 1 point that fits the calculation of USD 10 per single lot.