Trade currency pairs online

A pip, short for ‘point in percentage’, is a very small measure of change in the value of a currency pair on the foreign exchange (currency exchange) online market. It can be measured in terms of the quote or the underlying currency. It is a standardised unit for the smallest amount by which a currency quote can change, which is usually $0.0001 for USD-related currency pairs. A fractional pip or point is equivalent to 1/10 of a pip and there are 10 points to every 1 pip.

When trading currency pairs, spreads with low pips (0.0 pip spreads) indicate that a product is traded very frequently but pips can also be used for risk management tools like Stop Loss orders. Knowing your currency pair’s pip value allows you to manage your risk exposure, and potentially make the same profit across pairs. For example, if your Stop Loss equals 50 pips, the Take Profit could be 100-150 pips - as many think that having a SL/TP ratio of 1:2 or 1:3 is a good benchmark.

A rolling futures contract, also known as a continuous futures contract or a perpetual contract, is a financial product that allows traders to speculate on the future price movements of a particular asset, such as currency pairs, without an expiration date. In traditional futures contracts, there's a set expiration date, after which the contract must be settled. However, rolling futures contracts are designed to eliminate the need for expiration by continuously rolling over from one contract period to the next.

For currency pairs, rolling futures contracts work similarly. Instead of expiring at a specific date, these contracts are structured to maintain continuity by automatically rolling over from one contract period to the next, typically on a regular schedule. This process involves closing out the expiring contract and simultaneously opening a new one for the same underlying asset, maintaining the trader's exposure.The price of a rolling futures contract is usually based on the spot price of the currency pair plus or minus any adjustments based on factors like interest rates, dividends, or other market conditions.

Advantages of trading currency pair futures include:

Continuous exposure and long-term hedging: This allows traders to keep their positions open without needing to close out and open new positions when contracts expire.

Liquidity and flexibility: Futures often have higher liquidity which gives traders more flexibility when entering or exiting online markets compared to traditional contracts.