Question on Preschool - What is a Spread in Forex Trading

Beginner Questions
1

Newbie working through the course and at the Preschool stage. Feel like I’ve got a looooooonnnngg way to go.

Working through the “Spread Costs and Calculations” in “What is a Spread in Forex Trading” lesson.

Lesson 10 - What is a Spread in Forex Trading

Don’t understand where the “the value per pip” of $1 comes from. Can you help?

2

Simply, it’s the broker’s cost between buying and seling price.

  • The difference between 1.23234 and 1.23244 is 1 Pip.
  • The difference between 1.23234 and 1.23237 is 3 Points.
3

Thanks Steve. Looked through the example and in the lesson they have the values:
EURUSD at 1.35640 and sell EURUSD at 1.35626.

The difference is 1.4 pips. I don’t understand why the value per pip is $1. Example is taken from the lesson below. Can’t post the full URL as new users can’t post URL’s.

/learn/forex/what-is-a-spread-in-forex-trading