Big Figure Quote

In forex trading, a big figure quote refers to the initial digits of a currency exchange rate that are usually not shown in quotes. These digits are presumed to be known by traders and are generally excluded from price quotes or charts.

For instance, if the EUR/USD exchange rate is quoted as 1.1875, the big figure is 1.18. The last two digits, 75, are known as the “points” or “pips.” The big figure signifies the most important digits of the exchange rate, while the points or pips denote smaller increments.

Big figure quotes hold significance in forex trading as they can influence how traders place orders and interpret market movements. For example, if the EUR/USD exchange rate shifts from 1.1875 to 1.1895, this indicates a change of 20 pips, which may be crucial for short-term traders. However, the big figure remains unchanged at 1.18, suggesting that the overall movement is relatively minor.

Moreover, big figure quotes can also impact how traders set stop-loss orders. Stop-loss orders are designed to limit potential losses on a trade and are typically positioned at a specific distance from the current market price. Traders might opt to place their stop-loss orders just below or above a big figure, such as at 1.1790 or 1.1900, to minimize their exposure to short-term price fluctuations.

In summary, a big figure quote represents the initial digits of a currency exchange rate that are usually not displayed in quotes. These digits are crucial in forex trading and can influence how traders place orders and interpret market movements.