What is a Pip? Forex Pip Explained

A pip (percentage in point) is the smallest price move that a currency pair can make based on market convention. For most pairs, one pip equals 0.0001 (or 1/100th of a percent). For example, if EUR/USD moves from 1.1000 to 1.1001, that is a one-pip move.

For pairs involving the Japanese yen, a pip is 0.01 (or 1/100 of a yen) because the yen has a different decimal structure. So if USD/JPY moves from 150.00 to 150.01, that is one pip.

A pipette (or fractional pip) is one-tenth of a pip. Some brokers quote to five decimal places (e.g. 1.10001). The last digit is a pipette. This allows for tighter spreads and more precise trade management.

Pip value depends on your lot size and the pair you trade. For a standard lot (100,000 units) on EUR/USD, one pip is typically worth about $10. For mini lots (10,000 units), one pip is about $1. Use a pip calculator to determine exact values for your account currency and lot size.