Pips and Spread..

Hi

Expert if anyone can explain this ?

I know defination of PIP and Spread.

Can anyone explains PIPS to open means in Forex trading and Future trading ?
What is the spread indicate like 3 in Forex Trading ...IS it means difference between buy and sell price ?


If possible a simple example in layman terms will be good.

Thanks

Hi Kaps,

Good to see you getting into the nitty gritties of Forex trading.
My humble suggestion to you would be to ask this question in Preets thread on ask anything about forex, that way it will benefit a lot of people. As i am sure you will not be very active on this thread for long, so a good answer will be buried deep down for anyone else to see...

Just a suggestion... and preet is very patient in explaining things... so you as well as lot many new comers will be benefited.. take care and happy trading.

1. PIP: It's just like points we call in Nifty. The most common increment of currencies is the Pip.

Eg: If the EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP.

PIP varies for different currencies, and there are calculators , you can search it on internet search engines.

2. Spread: Spread is what we pay to broker in another way its a brokerage we pay.

Spread is the difference between the bid and ask price.

Eg: EUR/USD currency pair is 1.5760 and the current ask price is 1.5763, this means that currently you can sell the EUR/USD at 1.5760 and buy at 1.5763. The difference between those prices is the spread