What Is a Pip in Forex?
Leer en español →A "pip" is how traders measure price movement in forex. Knowing pips is the first step to understanding profit, loss and risk.
Pip = the smallest standard move
For most pairs, a pip is the 4th decimal place — 0.0001. If EUR/USD moves from 1.1000 to 1.1001, that's one pip. The tiny 5th decimal you sometimes see is a "pipette" (1/10 of a pip).
JPY pairs are different
For pairs that include the Japanese yen (like USD/JPY), a pip is the 2nd decimal place — 0.01 — because of how the yen is quoted.
How much is a pip worth?
Pip value depends on your position size. On a standard lot (100,000 units) of EUR/USD, one pip is about $10. On a mini lot (10,000) it's about $1, and on a micro lot (1,000) about $0.10.
Buy 1 standard lot of EUR/USD and it rises 20 pips → roughly +$200. The same 20 pips against you → roughly −$200.
Why pips matter
Spreads, stop-losses and targets are all measured in pips. A tight spread means you keep more of each move. Combine pips with leverage and position size to manage your risk per trade.
Put this into practice
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Open Account ▶Educational content only. Not investment advice. Trading involves risk.