What Is a Pip in the Forex Market? | BR Trading
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What Is a Pip in the Forex Market?

A pip is the smallest unit used to measure the price movement in currency pairs.
The word PIP stands for “Percentage In Point”.

In most currency pairs, one pip equals 0.0001 (the fourth decimal place).
However, for pairs that include the Japanese Yen, gold, silver, oil, or gas, one pip equals 0.01 (the second decimal place).

Example 1: Standard Currency Pairs

If the EUR/USD pair moves from 1.0962 to 1.0965, this means the price has gone up by 3 pips.

The same logic applies to all non-Yen currency pairs.

Example 2: Yen and Commodities

Let’s take USD/JPY as an example.
If the exchange rate is 115.75, and it moves up by 4 pips, the new rate would be 115.79.

Precision in Price Display

Modern trading platforms now show:

  • Five decimal places for most currency pairs

  • Three decimal places for Yen pairs and commodities (gold, silver, oil, gas)

The extra digit is called a fractional pip or pipette.
For example, if EUR/USD is displayed as 1.08471, and the rate increases by half a pip, it becomes 1.08476.



📌 Stay tuned for the next lesson to learn more about the Forex market!