PIP – Price Interest Point
This is the increment that all currencies trade in. Below is the pip value for each lot size and the larger the lot size the greater the pip value. The greater the pip value the greater the risk.
3 Types of Lot Sizes
Micro Lots .01
= Amount Trading $1000
= .10 pip value
Mini Lots .10
= Amount Trading $10,000
Standard Lots 1.0
= Amount Trading $100,000
Lot Size Values
Currency Pairs Values
All Pairs have two components for making up a trading instrument.
Base / Counter Base Always = 1 and the Counter is variable.
Example: Eur/Usd is symbol for Euro / United States Dollar
Eur is base and Usd is counter this is a direct pair because when the price of euro goes up the dollar goes down.
Current quote: Eur/Usd = 1.09 This means since the base is always 1 that it takes $1.09 dollars to buy one Euro which means dollar is weaker than euro. When price goes down to 1.08 it means dollar is getting stronger because it only takes 1.08 to buy same 1 euro. All pairs work this way and the first listed in ALWAYS base and equals 1. This is also known as a Direct Pair since USD is counter. On an Indirect Pair it works exactly opposite via Usd/Jpy or Usd/Chf. If the Pair goes up the dollar is getting stronger and if pair goes down dollar is getting weaker because the dollar is base currency. This is exact opposite of a direct pair. When Auto Trading you do not have to worry about the individual pairs because the Multi30 using a trade signal that automatically triggers trade and sets trading plan. This is good to know because if your using fundamental analysis you need to know which side to be on for the longer term when manual trading.