04/27/2008Can someone explain to me what pips are in the fxcm trading world? Also leverage? Margin?
- I am clueless but really want to understand it all...
- Best Answer:A pip is a minimum price change. For example, EUR/USD pair is quoted to 4 decimal places so 1 pip is 0.0001.
Leverage is the amount of bying power you get given a certain amount of cash. Leverage is closely connected to margin. That is, if the leverage is 100:1 then you need a 1,000 in cash (i.e. margin) to control a 100,000 position.