A pip (Percentage in Point) is the standard unit of measurement for price changes in forex. It represents the smallest move a currency pair can make.
Pip Values by Pair
| Pair Type | 1 Pip = | Example |
|---|---|---|
| Most pairs | 0.0001 | EUR/USD: 1.0850 → 1.0851 |
| JPY pairs | 0.01 | USD/JPY: 149.50 → 149.51 |
Pip Value Calculation
Standard lot (100,000 units):
- EUR/USD: 1 pip = $10
- GBP/USD: 1 pip = $10
- USD/JPY: 1 pip ≈ $6.68 (varies with exchange rate)
Mini lot (10,000 units): 1 pip = $1 Micro lot (1,000 units): 1 pip = $0.10
Pipettes (Fractional Pips)
Many brokers quote to 5 decimal places (2 for JPY pairs):
- EUR/USD: 1.08505 — the “5” is a pipette (0.1 pip)
Why Pips Matter
- Standardize profit/loss measurement
- Compare performance across pairs
- Calculate position sizes
- Set stop loss and take profit levels
Quick Reference
| Pips Won/Lost | Standard Lot | Mini Lot |
|---|---|---|
| 10 pips | ±$100 | ±$10 |
| 50 pips | ±$500 | ±$50 |
| 100 pips | ±$1,000 | ±$100 |