When price moves lets say one pip, what EXACTLY does that mean?

[John Starks]

When price moves lets say one pip, what EXACTLY does that mean? What is the mathematical model behind it? WHo calculates the pip change.

[iwjw]

it's supply and demand

if there is a best ask at 1.000 and next higher ask is at 1.001 price will move one unit higher as soon all of the 1.000 offered are taken out by the buyers. If there were no seller at 1.001 but 1.002 price would move two units at once

vice versa applies for price moving down

[shabz]

Think of it in terms of an auction. If the bids go higher price will move up.

[Ramon Ramirez]

it's supply and demand

if there is a best ask at 1.000 and next higher ask is at 1.001 price will move one unit higher as soon all of the 1.000 offered are taken out by the buyers. If there were no seller at 1.001 but 1.002 price would move two units at once

vice versa applies for price moving down

 

 

thank you for your response mate, I really appreciate it. :)

[123456789]

When price moves lets say one pip, what EXACTLY does that mean? What is the mathematical model behind it? WHo calculates the pip change.

 

 

go search microstructure stuffs and study them, do not forget this is a great forum. 8-)