PIP stands for percentage in points. It is the smallest price movements in exchange rates. The currency is generally quoted till the four decimal points (exception for Japan’s Yen, as it is quoted to 2 decimal points only). Hence a PIP is equal to 1/100th of a percent. It is also known as basis point.

For example, in case of EUR/USD of 1.3500/1.3508, the PIP spread is 3. To calculate the value of PIP in a currency pair, the trader should divide one pip in the form of a decimal with the current exchange rate and further multiplying it the notional amount of the trade.

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For example: An individual opens an demo trading account in forex market to see, how the market works. While using the demo account, an individual gets excited to the market fluctuations and is totally attracted by the market gains. While using demo account he thinks that trading in the market is the easy way to gain profits. Then the person enters into the real market with live account. After investing in real market, the person gets confused as to when to make profits and develops emotions and fears. While entering in to the real market the person develops many mental tensions, emotions and fear about money invested. If the person controls his excitement, while using demo accounts, he will not succumb to these type of mental tensions. Trading psychology is about preparing our brain mentally to relax, while doing trading.

Knowing about the trading psychology is necessary for all the investors to keep their brain peaceful while doing trading. Trading psychology helps the trader to control his excitement, remove fear and do not fall for greed.

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The plan of action which is made for achieving the goal in the market of foreign exchange is called as the Forex strategy. These plans are useful for tracking the tricky and the risky market.

The strategies which are being planned can be basic, simple , advance. For the beginners the basic forex strategy is being used. Some of the basic rules are being defined in the basic forex strategy for the beginners. Coming to the next stage of the beginners called the skilled beginners the simple forex strategy is used. They define the trading techniques. The other strategies also help the traders to get information about the trading.

The different types of Forex trading strategies are as follows.

All the forex strategies may not be perfect always. And they may not be accurate always. Hard work and the practice towards the strategies is important for any forex trader. The main constituents of Forex strategies are the technical analysis and the fundamental analysis.

The technical analysis is based on the charts and the movement of the market is being analyzed using the mathematical formulas. Booming region and the depression region are also identified using the Forex market. In the fundamental analysis the analysis is being spread around the world and here the economics of different countries are being analyzed.

Some of the best strategies which the professional forex traders use are:

1. Scalping Strategy: It will give the steady repeated profits although it seems as a downside. This strategy gives low margin of return with regard to the low risk.
2. For moving towards the second strategy, first the trader should get a currency pair position. After getting the position in the currency pair the buy or sell stop order of the trade is being done. Based on the change of the pair,there will be profits or the losses. For getting the profits, just follow the market trend. The trends can be observed by using the pivot point. Always keep a view on the market of forex. Based on the directional bias, you can place the short term or long term position .
3. Three day rolling pivot system is the another strategy. Here the rolling pivot range, will be considered as the point of reference for both the entry and exit trades. It shows how to stop the winning trade while it is changing into the losing trade. It also represents how to exit the trades when it is loosing.

These are some of the strategies which help in growing the consistent profits of the professional trader.

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