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.

Losses can exceed deposits. Ensure you fully understand all risks involved and seek independent advice if necessary.
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