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 EUR/USD below.

What is a pip
 

Example

  • EUR/USD: 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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.7 % of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

74.7 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Back to top