“In the forex market, the unit of change in the price movement called PIP. For example, the current price of GBPUSD is 1.5600 then if then their prices change so 1.5602 is called the rose as much as 2 pips ”
Smallest Currency Unit (point / pip) and Contract Size
Point (pip) is the smallest unit of price movements in the forex. One point (pip) for the pair GBP / USD is 0.0001 while the single point for the pair USD / JPY is 0:01. Example: GBP / USD, the movement of 1.8500 to 1.8550 is 50 points.
Value per point (pip) depends on the number of contract size (lot) and the currency used.
Contract Size is the smallest amount in forex trading. In general, the contract size that is often used is the Standard Lot, Lot Mini and Micro Lot. The standard lot is equal to $ 100,000, Mini Lot is $ 10,000 and Micro Lot is $ 1,000.
If your forex broker supports Standard and Mini Lot, it means you can trade with a number of multiples of 100,000 and 10,000. For example: $ 30,000, $ 120,000, and others.
Suppose you buy (buy) GBP / USD 1 lot. Then the market moves up to 10 points. And then you close your transaction, then the advantage that you can adalahc 0.0010 x 100,000 = $ 100.
By knowing more about this lot pips and now you know that the size of the purchase amount is a lot, this loat term equivalent to the term Dozen, Kodi, RIM and others. while the size of the market movement Point or so-called PIP.