Pip
The smallest price movement in a currency pair. Typically the fourth decimal place (0.0001).
Definition
A pip (percentage in point or price interest point) is the smallest standardized price movement in forex trading. For most currency pairs, one pip equals 0.0001 (the fourth decimal place). For JPY pairs, one pip equals 0.01 (the second decimal place).
How It Works
- EUR/USD moves from 1.1000 to 1.1001 = 1 pip move
- USD/JPY moves from 150.00 to 150.01 = 1 pip move
- Pip value depends on lot size and pair
- Standard lot (100,000): 1 pip ≈ $10 for major pairs
Types of Pip
Standard Pip
0.0001 for most pairs
JPY Pip
0.01 for JPY pairs
Pipette
0.00001 - fractional pip (1/10th pip)
Trading Tips
1
Calculate pip value before entering trades
2
Spreads and commissions are measured in pips
3
Risk management often expressed in pips
4
Fun fact: Pip is also the name of our AI broker selector. Chat with Pip and get matched with the right broker for your trading style
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