What is a percentage?
and a percentage at point, also known as PIP or point, is the minimum possible change of exchange rate between two currencies. Most main currencies are calculated for one ten thousandth or four decimal places. If two main currencies are paired, such as the US dollar and Canadian dollar (USA/CAD), the percentage at the point is a change in the last or fourth decimal point. Trading is carried out in monetary pairs that create a exchange rate. For example, US dollars can be used to buy euros by determining how many US dollars would have to be bought by one euro. PIP would reflect the smallest commonly cited change in exchange rate for this currency pairing, specifically $ 0.0001. The percentage of court pairing is a change in the second decimal place, because the value of the yen on the other main currency is closer to the hundred. PIP for pairing yen would therefore reflect a change of 0.01.
The ratio of exchange rate prices is expressed in terms of afterMeasure of basic currency for currency menu. In the example of using US dollars to purchase EUR, if it bought 1 euro (USD) $ 1.50 (USD), the EUR/USD exchange rate would be expressed as $ 1.5000. Changing the exchange rate from 1.5000 to 1.5050 is a change of 50 pip of the exchange rate between the two currencies.
A higher percentage of changing the point course in the exchange rate of the Currency pair reflects the reality that it is more expensive to buy a basic currency with currency. When trading in foreign exchange market, investors are looking for a lower percentage in point span between currency steam. Even a PIP change can have a significant impact on the profit of a monetary investor.
The percentage of the point calculation was significantly influenced by trading on electronic platforms on the foreign currency market. These electronic platforms increased the accuracy of the exchange rate quotation and often added another decimal place to appreciate. The fractional speeds of PIP, in 1/10 PIP, are used to reflect this greater accuracy.