In this market, the value of currencies is determined to the fourth decimal place. Accordingly, pips is the fourth digit after the comma, the change of which is the smallest variation of quotations.
Pips is a reduction of two English words «percentage» and «point». Therefore pips can be defined as a percentage point representing the minimum price variation on the Forex exchange (1/100 per cent). This popular exchange tool helps to quickly record the slightest change in quotes. At the same time, the pips perform the function of course clarification starting with the fifth decimal place. Many traders try to earn small sums on short deals, predicting such changes.
In general, Forex pip is a unit of measure that displays a change in value caused by price fluctuations between currencies of a given currency pair. There is a certain trading strategy that includes a set of rules and algorithms used to make decisions in trading in the Forex market, namely paying attention to all trivia, including pips. Different strategies are based on either not technical analysis or fundamentals. But there are also combinations of two strategies.
50 pips a day forex strategy allows investors to earn practically without action. The strategy is that:
- Set the 1-hour candlestick to 7 AM GMT in your chart. This time zone is best suited for this strategy to benefit from daily traffic.
- When the 1:00 candlestick ends at 7:00 a.m., the user must open two opposite accounts simultaneously. If there is a blue arrow up, wait for the bar to close and if the arrow is still left (sound notice is given) open the position.
- Choose a stop loss and take a profit order for the order that is executed. When a red arrow appears down, wait for the bar to close and if the arrow is still left (sound notice is given) open the position.
- Then cancel the other one. As soon as you open the order, install Stop Loss.
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Before using the strategy through a real score, it is better to try it on the demo version.
This strategy is more appropriate for those who try to consolidate profits on a daily basis. So they close deals at the end of the day. The strategy allows working with any currency pairs.
The most important thing is to cancel the order in time while the other one is executed. And such a strategy will make it easy to earn in about an hour.