The Forex Pip measures the success or failure of a trade. Find out how to maximize pips (and profits) while minimizing risk in Forex trading.
As you'll soon learn,Guest Posting the www.fxcm-markets.com/ Forex pip can be your best friend or worst enemy. First, we'll go over what a Forex pip is exactly. Then I'll discuss what you can do to maximize pips, and your profits, while simultaneously minimizing your losses.
What is a Forex Pip?
First things first. What is a pip exactly? The smallest increment in the forex market is called a pip. It stands for "percentage-in-point". Since most major currency pairs (the Japanese Yen being an exception), are priced to 4 decimal places, the smallest change would be reflected in the last decimal point.
Basically, the Forex pip is the measuring stick for gains or losses when trading currency. To better understand this, let's take a look at an example. EUR/USD could be offered at 1,1815, and then bid at 1,1820. This is a spread of 5 pips. If you buy a certain amount of Euros for the bid price and later sell them at the offered price, then your profit is 5 pip. (Obviously. the amount of money that you make is dictated by how much currency you bought and sold for profit.)
What the Forex pip means to you
Forex trading is successful when you maximize the pips you earn by trading as much as you can. Thinking long term and logically, to be successful you need to have more pip gains than pip losses in your trading. It is not possible to win all the time. What you really want are more pip wins than losses.
How To Maximize Pips and Minimize Losses
The perfect scenario is to buy currency at its lowest value, and then sell it once it has reached its highest value before dropping. It is not as easy to do as it sounds. The rise or fall in currency value is determined by a variety of factors. So, what can you do?
Forex traders are increasingly turning to Automatic Forex Robots. It is an excellent way to maximize profits while minimizing risk. These computer programs, or scripts, stay up to date with the Forex market. They trade based on predetermined indicators that are set by professionals. So, instead of trying to figure out everything for yourself and being glued to your computer 24 hours a day, from Monday to Friday, you let the automated Forex software do the trading for you.
Why I Recommend Software To Maximize Forex Pips
As I mentioned, the software can monitor and respond to the currency markets based on predetermined indicator. However, there is an even more important reason to use a Forex robot instead of doing all the trading yourself... EMOTION! Let me explain...
Forex trading is very exciting. Watching the pips go up and down, especially when real money is on the line, is quite a thrill. You don't want your emotions to drive your trading. Forex trading is a thrilling and potentially profitable activity, so it's normal to feel greed and fear. And you don't want these emotions clouding your judgement in your Forex trading. By removing emotion from your trading, a computerized program can help you to make your currency trading profitable.
It is a great feeling when you see the pips working in your favor. So if you want to maximize Forex pips and minimize losses, get a automatic Forex robot and put your trading on autopilot. Not only is it easier, but also more profitable.