Pip= what puts money in your
pocket . It's the change in value between currencies.
1 Pip= USD $ 10 ( for Standard Lot)
Lot = size of your trade which depends on your initial capital.
Lot = size of your trade which depends on your initial capital.
Ex. USD/JPY = 81.50 1 USD=
81.50 JPY
If price rises to 81.51 or greater ,
BUY (LONG)
If price lowers to 81.49 or lesser,
SELL (SHORT)
Fraction Theory:
EUR
= 1.350
USD
If EUR increase , BUY(LONG)
If USD increase, SELL (SHORT)
The basis of the above rules should be the general trend of the Graph of the underlying currency pairs. If the general trend is Up , we can Buy or Long the currency pair but if its going Down , we need to Sell or Short the currency pair. The Stop Loss is assigned in order to prevent further losses if you happen to made the wrong choice . The Profit Target is assigned usually twice the Stop Loss to make a profit to loss ratio of 2:1.
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