What is a pip?
4 min read · Educational content, not financial advice
A pip (percentage in point) is the standard unit for measuring a price change in a currency pair. For most pairs, a pip is the fourth decimal place — a move from 1.0850 to 1.0851 is one pip. For pairs quoted with two decimal places, like those involving the Japanese yen, a pip is the second decimal place.
Pips matter because they're how traders express both price movement and risk. A stop-loss might be set '20 pips' below entry; a target might be '40 pips' above it. Broker platforms often also show 'pipettes' — a further decimal of precision — but the pip remains the standard reference unit.
Because pip value changes with lot size and account currency, it's worth calculating exactly what a pip is worth for your specific trade before entering it — our Pip Calculator does this instantly.