Trading glossary
What is a pip?
A pip is the standard unit of price movement in forex: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen.
If EURUSD moves from 1.0850 to 1.0851, it has moved one pip. For USDJPY, a move from 150.00 to 150.01 is one pip. Many brokers quote a fifth decimal (or third for yen pairs), which is a tenth of a pip, sometimes called a pipette.
Outside forex, units vary. Gold is often discussed in dollars or points, and indices in points.
How traders use it
- Measure stops and targets in pips to compare trades across pairs.
- Check your broker's definition for metals, indices and crypto, which differ.
- Convert pips to money with your position size before deciding risk.
Example
EURUSD moves from 1.08500 to 1.08750. That is 25 pips, or 250 pipettes on a five-decimal quote. For USDJPY, a move from 150.20 to 150.45 is also 25 pips.
Frequently asked questions
What does pip stand for?
Commonly percentage in point or price interest point.
How much is a pip worth?
It depends on the pair and the position size. For a standard lot of a USD-quoted pair it is about 10 US dollars.
Related terms
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.