Pip
The smallest price movement in a forex pair, typically the fourth decimal place (0.0001) for most pairs or second decimal (0.01) for JPY pairs.
What is a Pip?
A pip (percentage in point) is the smallest standard price movement in forex. For most currency pairs, one pip equals 0.0001 (the fourth decimal place).
Pip Values by Pair Type
| Pair Type | One Pip | Example |
|---|---|---|
| Most pairs | 0.0001 | EUR/USD: 1.0850 → 1.0851 = +1 pip |
| JPY pairs | 0.01 | USD/JPY: 150.00 → 150.01 = +1 pip |
Calculating Pip Value
The monetary value of a pip depends on:
- Lot size (standard = 100,000 units)
- The quote currency
- Current exchange rate
Example: For EUR/USD with a standard lot, 1 pip ≈ $10 USD.
Why Pips Matter
Pips help traders:
- Measure profit and loss
- Set stop-loss and take-profit levels
- Compare spreads between brokers
- Calculate risk per trade
Check our Currency Strength Meter to find pairs with the best trading opportunities.