Basics
Pip
The smallest standard price move in a currency pair — usually 0.0001 (or 0.01 for JPY pairs).
Also called: pips
In practice
If EUR/USD moves from 1.1050 to 1.1058, it has risen by 8 pips. On a standard lot (100,000 units), each pip is worth roughly $10, so that 8-pip move is about $80 per lot. On USD/JPY, a move from 150.00 to 150.15 is 15 pips, because the pip for JPY pairs is the second decimal place.
Why it matters for traders
Pips are the common language traders use to measure price movement, stop distances and risk. When you say your stop is 20 pips and your target is 40, you have instantly defined a 1:2 risk-to-reward trade and can convert that into a position size in lots before you ever click buy.
Common pitfall
Beginners confuse pips with points or cents, or count fractional 'pipettes' as whole pips and panic at tiny moves. The real pitfall is fixating on pip counts without converting them to money: a '20-pip stop' means nothing for risk until you multiply by the pip value for your lot size. Always translate pips into account currency before you trade, and remember JPY pairs count the second decimal, not the fourth.
Putting it in context
Within the basics group, this term is one of the building blocks every later concept assumes you know. Beginners are often tempted to skip ahead to strategies and indicators, but most costly errors trace back to a shaky grasp of foundational ideas like this one — how prices are quoted, how trades are sized, and how money actually moves in and out of a position. A practical way to lock it in: after reading the definition, open a demo account and find a live example of this term on a real chart or order ticket within the next day. Concepts that stay abstract get forgotten; ones you have seen with your own eyes on EURUSD or gold tend to stick, and they compound as you move into risk management and analysis.
Lessons that use this term
- Pips and points
The unit price moves in — what a pip is worth and how to calculate it.
- Lot sizes and position size
Standard, mini and micro lots, pip value per lot, and how to pick a size your account can survive.
Related tips
Related terms
Trade Forex, Metals & Crypto with Exness
Ultra-low spreads from 0.0 pips, instant withdrawals, no deposit fees. Regulated across multiple jurisdictions.
Spreads may fluctuate and widen due to factors including market volatility, news events, market open/close, and others. Processing times may vary depending on the chosen payment method.