Before you get too confused

You should know that there is

examples used in this report so far are just that:

only one reliable source for quotes: Your Broker. Theexamples.

I've shown you EUR/USD pairs with more than 4 decimals places in the quote - and I've

shown you a USD/JPY pair with more than 2 decimals in the quote.

Do not let this confuse you.

The fact is that you can get quotes online from a variety of public sources, but these quotes

do not reflect the true buy/sell rates

Instead, they represent what is known as '

Mid-market rates are calculated by finding the

transactions throughout the entire market. Further, every broker has its own set of

fees or overhead charges per transaction, and these fees are

provide.

So, when you look at the mid-market rate, what you're looking at is an average, not an exact

quote. This is why the number of decimal points appears to vary.

Once you have your own account with a reputable broker, though, you'll receive accurate

quotes which follow the 'rules' regarding how many decimal points out a quote should go on

a given currency pair.

.mid-market rates'.average between buy and sell rates on highvolumeincluded in the quotes they

A Typical Pip Value Calculation

The EUR/USD pair has a

base currency. Similarly, a 'Mini' Lot transaction of EUR/USD has a fixed value of U.S. $1.

In order to calculate the actual pip value of the base currency within the pair, you must

divide 1 pip by the current exchange rate, and then multiply the result by lot size:

EUR/USD = 0.0001 (1 pip) / 1.30000 (exchange rate) =

EUR 0.0000769 x 100,000 (standard lot) = EUR 7.69

Next, we want to get our result into the base currency of our account. If your account uses

U.S. Dollars for the base currency, you would multiply again by the exchange rate:

7.69 x 1.30000 = $10.00 pip value
fixed value of U.S. $10 for Standard Lots, or 100,000 units of

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