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Forex market is one of the most risky and profitable markets in the world where traders can make millions in seconds and professional traders can lose their capital in nanosecond. You should educate yourself well before you start trading in this world. This market contains many abbreviations and strange phrases you should know all this phrases before you start selling and buying currencies. One of these phrases the "Forex Trading Pips" which means the smallest change in the quotes price which you can start trading with it. To understand it you can define it as a penny, but you should know that it is not exactly the same. The following example will makes you understand it well:-

Before: 1 Euro / U.S. dollar = 1.4802, after: 1 Euro / U.S. dollar = 1.4804. Before: 1 U.S. dollar / British pound = 0.6113, after: 1 U.S. dollar / British pound = 0.6114 Before: 1 Swiss franc / U.S. dollar = 0.9778, after: 1 1 Swiss franc / U.S. dollar = 0.9778

The first example means there are two pips change, the second example means there is only one change and the final example means there are no pips. Forex traders monitor these pips and they start buying currencies when there are negative changes and they start selling currencies when there are positive changes. You should also know that all the major currencies in this market is rounded to four decimals only and the only exception to this rule is the Japanese yen where it is rounded to only two decimals.

My advice is to read more forex training courses before you start trading in this market to understand more forex phrases and keywords. You can find good courses at FxTradingCenter site as well as you can read reviews for various foreign exchange software robots including no loss robot review which is one of the good trading robots.

Article Source: http://EzineArticles.com/?expert=Ahmed_El-Naggar


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Forex Pips  

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