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WHAT IS A ‘PIP’?

WHAT IS A ‘PIP’?

A  “PIP” stands for Point in Percentage, and is the unit of measure used by forex traders to define the smallest change in value between two currencies. This is represented by a single digit move in the fourth decimal place in a typical forex quote (except JPY pairs). For example, if the price of EUR/USD moves from 1.1402 to 1.1403 this would be a one pip change. If the price of a JPY pair like USD/JPY moves from 113.31 to 113.30, that would be also one pip. To understand the value of a pip, you must first understand what “Lots” are. 

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