Hello dear traders, my name is Petko
Aleksandrov from EA Forex Academy and in
this lecture I will make it clear about
the pips
and the points. I had many people asking
me is this in pips, is this in points, how
many points is the spread, the swap and
basically I want to make it clear for
everybody. And as well probably I will
update some of the courses that I have
ready but difficult to hear comes with
the cryptocurrencies mostly because
these are the ones with huge spread and
some brokers are having after the second
or the third digit. And also for the
currencies most of the brokers have with
5 digits, some with 4 still but
anyway I want to make it clear for
everybody. All right? So, the first point
is what is digit? If you have a price of
12345 this means you
have 0 digits. So, let's say this is a
stock. OK? And the price is 12345 and
there is nothing after that, there is no
.05 or 0.5 nothing. OK? So,
it's a whole number meaning digits are 0,
pip is 1, point is 1 as well. OK? So, when
there is nothing after a point, so if
there is no point at all, there is no
digits. Simply said what it's after the
point, after the comma or whatever you
call it is called digit and in this case
the pip equals to the point. All right?
The next example is when you have
.3 for example, point any number. You have
already 1 digit, so basically this is
your digit. And in this case you have
pip 0.1 and you have point
0.1. So, basically when you
have only 1 digit after the point this
means that the pip and the point are
equal. All right?
The next case is when you have 2
digits after the point, so 120.12,
meaning as well that the pip equals to the
point. And the next case is when you have
3 digits after the point. This
normally comes for the USDJPY at the
moment or any of the JPY pairs. So, we
have 3 digits and here comes the
difference with the pip and the point. So,
12 pips and 3 points-this is how we
say, we pronounce the price as 120.12, normally we don't say the point but this
is the smallest change you can see on
the price. OK? So, here already we have
3 digits we have pip of 0.1 so 12
pips and the point is simply the last
one. OK? So, here already the pip is 10
times bigger than the point. The next
case what I will show you is when we
have 4 digits, let's say this is the
price of EURUSD, doesn't matter what
example I would take but it's a
currency. So, basically you will see 4
digits after the point and here
basically you don't have point because
the point is equal to the pip. So, here at
1.2345 you have your pip as 45 and
point is as well 45. So, the
point is here but it doesn't make any
difference from the pip. OK? And the
next case is now what you see with most
of the brokers where we have pips and
the last one is the point. Into all days,
guys, all the brokers were till the
fourth one, till the fourth digit and the
pip was equal to the point. And now
because there are so many brokers on the
market and because of the huge
competition over there
most of
them started providing spread lower than one pip. And because there was nothing
before lower than one pip they created
the point.
So, now often you will see brokers
providing you spread 12345
points. OK? 
Which of course is good for everybody
that is on trading side, because you're
paying less spread. OK? So, right here
when you have 5 digits the price is
1.2345 pips and 4 points but normally
we don't say the 4 points when you
pronounce the price. But the points are
there and simply again said pips are
ten times bigger than the points. So, an
easy way to remember it is when you have 3 digits and 5 digits is where
you have the pip ten times bigger
than the point and when you have 2
and you have 4, you are having pip
same as point. So, basically you can say
there is no points or you can say that
the pip is the same as the point. I hope
it's clear. I don't think you will find
broker nowadays that will show you 1
digit price or without digit price but I
just made it this way, so it will be
easier for you to understand me. And the
next question is about the spread, the swap,
the Stop Loss and the Take Profit. If you have spread and swap normally the spread and
the swap are in points or in USD, or
any other currency. For example, you can
see some of the brokers for the crypto
they provide swap negative of $25 and
there are no points to calculate there
or you can see it as well in points, but
the spread nowadays is mostly in points. Of course there are brokers with huge
spread, simply you can stay away from
these brokers. And the Stop Loss and the Take
Profit it's normally in pips, could be in
points as well but especially the
softwares
that we are using, for example EA Studio
works with pips and FSB Pro works with
points. So, this is how you should work
with these softwares if you are and
basically this is how the prices of the
stocks, of the cryptocurrencies, of the
normal currencies are basically
structured. OK? Hope all is clear here,
guys, thank you for watching and I wish
you have a great day. Cheers, bye!
