What is a PIP in Forex Trading?

Standing for Price Interest Point , a Pip is the smallest whole increment used in Forex Trading.

What is a pip?

  • A "pip" is the smallest whole increment in any Forex pair.

  • For pairs quoted in 3 decimal points a pip increment is based on the second decimal.

  • For pairs quoted in 5 decimal points a pip increment is based on the fourth decimal, like the EURUSD below.

What is a pip

Example

  • EURUSD: A movement from 1.362(9)8 to 1.363(0)8 is a 1 pip move

  • In USD/JPY, a movement from 104.4(7)1 to 104.4(8)1 is 1 pip

So how much is a pip worth? This is determined by the currency of your account, the pair you are trading and the position size of your trade.

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