Pip, pips


    What is a pip?

    In forex trading, a pip is a measurement of how far the price has moved. Forex traders use pips as a measure for the win and loss in a trade.

    1 pip has the value of 1/10,000th of the quote currency of most major currency pairs. In the case of the Japanese yen, a pip would be worth 1/100th of a Japanese yen.

    Nowadays, most brokers offer an even smaller price movement – 1/100,000th of the quote currency (1/1,000th for the yen). This smaller unit is sometimes called “pipette”.

    To illustrate, if the price of the EUR/USD is 1.35392, the pip is the fourth decimal place, in this case, the 9. The pipette is the 5th decimal place, in this case, the 2.

    If the price of the USD/JPY is 77.084, the pip is the 2nd decimal place, in this case, the 8. The pipette is the 3rd third decimal place, in this case, the 4.

    Further reading

    Read more about basic trading terminology:

    If you are new to forex trading, we recommend you our beginner strategy: