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Investment
Pip
The smallest price move in forex trading — usually the fourth decimal place in a currency pair.
Most major pairs move in pips of 0.0001. Japanese yen pairs use 0.01 as a pip. Understanding pips helps traders calculate profit, set stop-losses, and compare different currency pairs quickly.
It's like a single centimetre on a ruler — tiny on its own, but hundreds of them add up to real money.
Real world: If EUR/USD moves from 1.0850 to 1.0855, that is a 5-pip move. On a standard lot (£100,000), each pip is worth about £7.40. Traders talk in pips instead of pounds to keep numbers simple.
💡 Pips are the tiny building blocks that make or break a forex trader's day.