Let's say that you simply opened your position at one.16650, and you purchased one contract. this can be such as shopping for a hundred,000 EUR. Notionally, you're marketing bucks to get Euros. the worth of the bucks that you simply ar notionally marketing is of course set by the rate of exchange.
For example:
EUR 100,000 x 1.16650 : USD/EUR = USD 116,650
You closed your position by marketing one contract at one.16660. Notionally, you're marketing the Euros and shopping for the bucks.
EUR 100,000 x 1.16660 : USD/EUR = USD 116,660
That means that you simply originally sold-out $166,650, and concluded up with $166,660, for a profit of $10. From this, we will see that a one-pip movement in your favour created you $10.
In fact, this mercantilism pips price is consistent across all FX pairs that ar quoted to four decimal places – a movement of 1 pip within the rate of exchange is price ten units of the quote currency (i.e. the second-named currency) if you're dealing in a very size of 1 heap (which is often a hundred,000 units of the bottom currency - the first-named currency). A move of ten pips is price a hundred units of the quote currency. A move of a hundred pips is price one,000 units of the quote currency, and so on.
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