Big figure applies to highly liquid and volatile markets, like the Forex market, where rapid moves in price action are frequent. Abbreviations and synonyms of big figure are big fig and handle, respectively. While professional and institutional traders use big figure FX, retail traders should know its meaning and how to trade with it, as ECN brokers connect them to the interbank market, where the term applies.
We will define big figure in Forex, present an example, and an example of how to trade with it, which will assist you in becoming a well-rounded and informed trader.
Big Figure in Forex - What is it?
Big figure in Forex refers to the whole value of a price quote, also known as the stem. Professional and institutional traders often omit the big figure, especially during volatile markets, abbreviating currency quotes. They assume that active traders know the big figure, making it redundant.
There are exceptions, for example, when the currency quote reaches a new level or price action moves through levels rapidly. Retail brokers usually provide the full quote in their trading platforms, but professional alternatives have the big figure in a notably smaller size while focusing on the last two digits.
A Big Figure Example
Assume the EUR/USD traded with a bid price of 1.0715 and an ask price of 1.0716. Professional traders in the interbank market will omit the big figure, which is 1.0700, and quote this currency pair as 15/16, the last two decimals.
Should the EUR/USD drop to 1.0699 / 1.0700, traders may require clarification and request a full quote, including the big figure.
The Big Figure Essence
Most retail traders lack the knowledge, depth, or tools to cover the Forex market and rely on simplified strategies and well-known support and resistance levels. They often trade during their breaks from their day jobs or return home, placing orders when professional traders step away, only to see the market move against them once institutional money returns. Big figure trades aim to exploit the limitations of retail traders.
How many Pips create a Big Figure
One hundred (100) pips usually create a big figure, for example, a move in the EUR/USD from 1.0700 to 1.0800, or from 127.000 to 128.000 in the USD/JPY. Each time the price changes to another round number, the big figure becomes more relevant.
Tips for Trading the Big Figure
There are numerous trading strategies to profit from the big figure in Forex, and below are some tips that may benefit traders.
Tips for trading the big figure:
- Trade when the big figure coincides with significant support or resistance levels on times frames like the D1 or W1
- Keep take profit and stop loss levels tight
- Understand that not all big figure values offer equal trading opportunities. For example, a move from 1.2700 to 1.2800 carries less weight than one from 1.2900 to 1.3000
Breakouts and breakdowns plus their reversal before a continuation present profitable short-term big figure trading opportunities
Big Figure Conclusion
While most retail traders will never use the big figure, understanding its significance and how institutional traders use it can improve trading results.
FAQs
How many pips is a big figure?
In most cases, 100 pips represent a big figure.
What is the big figure?
The big figure is the stem, or the whole number, of a price quote. For example, if the quote is 1.0715, then 1.0700 is the big figure, with the next one either 1.0600 or 1.0800.