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Forex Pips in Practice Mode

By: / Learning / Comments Off on Forex Pips in Practice Mode

This is an example with the U.S. dollar as the base currency, as in USD/JPY

 

In this case, the value of one pip depends on the USD/JPY exchange rate.

 

So, using the same example:

 

You buy 10,000 U.S. dollars against the Japanese yen at 106.20 and you earn $0.94 for every pip increase in your favor.

 

If you sold at 106.40 (a 20-pip increase), you would make $18.80.

 

If the above circumstances were the same except that you sold at 106.00 (a 20-pip decrease), you would lose $18.80.