Points and differences in selling and purchasing prices

Points and differences

Points and the differences illustrate the value of a currency pair for the investor and speculator.

What is the "point"?

The point is a numeric value. In the Forex market is given the value of the currency in the form of points. And one point equal to two points are equal to 0.0001 0.0002 0.0003 and three and so forth.

The point is the smallest rate of change in price can occur in the exchange rate. And most currencies are priced in four figures after the decimal point. For example, five-point difference in the EUR / Dolaromriki be 1.2530/1.2535

In the major currencies, the price of the yen does not contain the four digits after the decimal point. In Aldolarralomriki / JPY price is given only two digits after the decimal point - so Ftae on the U.S. dollar / yen will look as follows: 114.05/114.08 and the bid by the three-point difference between the sale price and purchase price

What is the difference?



The difference is the difference between the purchase price (also called the presentation) and selling price (also called the ask price). Given two prices for the currency pair and the difference represents the difference between what the market maker gives to buy from a trader, and between what is required by the market maker for sale to the trader.

If the trader buys any currency and immediately sells it - there was no change in the exchange rate - the trader will lose money. The reason for this is that the offer price (which represents how much will) always be less than the asking price (which you'll get it).

For example, in the exchange rate of the currency pair EUR / USD bid / ask at your bank may be 1.2015/1.3015. This difference is composed of 100 points. This difference is very high compared with prices of supply / demand for Forex investors on the Internet, such as 1.2015/1.2020 - Bakarq 5 points.

In general, the difference is smaller better for Forex investors since the smallest change in exchange rates make them reap profits from their business easily.

The difference is the source, who won it the market maker see the advantages of trading ™ For more information on the differences.