Mathematics of pip production

摘要

When getting started in forex. it is useful to know how potential income is related to the amount of money in the account, the pips produced and the leverage used. The dollar amount of your account is your stake and will dictate how you trade. A pip, also called a point, is the smallest price increment a currency can make. "Pips produced" refers to the total net of profitable pips per month in our examples. The term many people get confused is leverage.rnHere is how leverage works. A trader starting with $5,000 in his trading account can put on a currency position with an underlying value of more than $5,000. Some firms allow traders to trade 100:1 leverage. That means a trader with a $5,000 account could put on a long or short position with an underlying value of $500,000.