What is a pip in forex ?

Pip is the smallest change an exchange rate of a currency pair can make on the market. A pip is usually, but not always, the last decimal place of a quotation.

Pip is an acronym for "percentage in point" - standardized unit of change in the price of a trading instrument. 1 pip is calculated by the 4th digit 0.0001.

For investors interested in trading currencies, understanding What is Pip is an important element in analysing currency and market movements. It helps them determining the overall cost and profit that can be generated by a trade.

Most currency pairs are priced to 4 decimal places with the pip being the change of the last decimal point.

For currency pairs displayed to 4 decimal places, one pip = 0.0001

Only for the group of currency pairs with the quoted currency Japanese Yen, as well as a “Precious Metals” group that are an exception and are displayed to only two decimal places, one pip = 0.01