a pip, bid/ask price , the spread and leverage:

A pip: a common term in the business serves as an abbreviation for point in percentage or price interest points it is the unit of measurement to express the change in value between two currencies. Using the euro USD exchange rate depicted about 1.07- we can see in order to buy one Euro it's caused 1.0 7950 dollar. As using the market tips Tu 21.0 7960 dollar. Price has advance one peep higher that is a move from 0.795 to 0.796. a 0001 price move. The majority of Forex pair go out to 4 decimal place through there are some expectation such as the Japanese yen pairs that go out to two decimal places the last value on the quotation: 1.0 7950 dollar is called a pipette, which equals 1/10 of a pip. If the euro USD moves to 1.07 9528 a 2-pip has been observed. Bid/Ask price: 1) the bid price is the price trades execute a short position. 2) the ask is a price used to enter into a long position. Below is a standard order window available on MT4 or 5 platform. The forex pair is trading at highlighted above. This means that market has an ask over offer price of 1.2 874 and a bit price of 1.2 873. Traders can, therefore, by the GBP against the US Dollar at 1.2 874 and sail the GBP at 1.2 873. the spread: the difference between the bid and ask is called the separated another common term you will hear often which basically represent brokerage service cost. The GBP USD Forex pair above shows the separate or cost to purchase a a unit of GBP using market in half up for 5 pipettes. The brother of spread the more expensive is to do trade liquid and frequently trading major currency pairs routinely of a small bid and ask spread while the more erratic less traded shares typically most larger beat ask spread exotic and same minor currency pairs. leverage: leverage is availity to control large sums of capital using very little of your own funds. Leverage however is a double Sword and can be considered high risk if not controlled. Risk of excessive leverage has the potential to enlarge your profits or losses by the same magnitude. Thanks..