Is a pip always 0.0001?

For most currency pairs, one pip is 0.0001 — the fourth decimal place. The exception is pairs that quote the Japanese yen, where a pip is 0.01, the second decimal place, because the yen trades at much larger nominal values.

A pipette is one tenth of a pip — the fifth decimal place on most pairs, or the third decimal on yen pairs. Most modern brokers quote fractional pips so you can see price move 1.08451 to 1.08452, which is one pipette, not a full pip.

How much is one pip worth?

Pip value depends on the pair and your position size. On a standard lot (100,000 units) of EUR/USD, one pip is about $10. On a mini lot (10,000 units) it is about $1. Use a pip value calculator to confirm for your exact pair and lot size.

Glossary

What is a pip in forex?

A pip is the smallest standardised amount a currency pair's price normally moves. It is the unit traders use to measure gains, losses, spreads, and risk. Get this one concept right and the rest of forex maths falls into place.

Pip, defined

"Pip" stands for percentage in point (or price interest point). For most currency pairs, one pip is a price movement of 0.0001 — the fourth decimal place. So if EUR/USD moves from 1.0840 to 1.0841, that is a one-pip move.

The exception is pairs that include the Japanese yen. Because the yen trades at much larger nominal numbers, a pip on those pairs is 0.01 — the second decimal place. USD/JPY moving from 156.20 to 156.21 is a one-pip move.

Pip vs pipette

Open a modern trading platform and you will usually see one extra decimal place: EUR/USD quoted as 1.08415 rather than 1.0841. That final digit is a pipette, also called a fractional pip — one tenth of a pip.

Pipettes let brokers quote tighter, more precise spreads. When price ticks from 1.08415 to 1.08416, it moved one pipette, not a full pip. Knowing the difference stops you from over- or under-stating how far price has actually travelled.

Pip value: what a pip is worth

A pip is a unit of price. Pip value is what that unit is worth in money, and it depends on two things: the pair you are trading and your position size (lot size).

Standard lot (100,000 units) of EUR/USD: roughly $10 per pip.
Mini lot (10,000 units): roughly $1 per pip.
Micro lot (1,000 units): roughly $0.10 per pip.

Pip value is the bridge between a chart and your account balance. A 30-pip stop loss on a standard lot of EUR/USD risks about $300; on a micro lot it risks about $3. Same chart, very different exposure.

Worked examples

EUR/USD  — 1 pip = 0.0001
  1.08400 -> 1.08500  =  10 pips

USD/JPY  — 1 pip = 0.01
  156.200 -> 156.300  =  10 pips

XAU/USD (gold) — broker-dependent
  most brokers: 1 pip = 0.10 (e.g. 2335.0 -> 2335.1)
  always confirm the contract spec with your broker

Gold (XAU/USD) deserves a note. It is quoted in US dollars per ounce and is not a standard currency pair, so "pip" is defined differently across brokers — many treat one pip as a 0.10 move, others count whole dollars as "pips". Because gold moves fast, always confirm the contract specification before you size a trade.

Frequently asked questions

Is a pip always 0.0001?: For most currency pairs, one pip is 0.0001 — the fourth decimal place. The exception is pairs that quote the Japanese yen, where a pip is 0.01, the second decimal place, because the yen trades at much larger nominal values.
What is a pipette?: A pipette is one tenth of a pip — the fifth decimal place on most pairs, or the third decimal on yen pairs. Most modern brokers quote fractional pips so you can see price move 1.08451 to 1.08452, which is one pipette, not a full pip.
How much is one pip worth?: Pip value depends on the pair and your position size. On a standard lot (100,000 units) of EUR/USD, one pip is about $10. On a mini lot (10,000 units) it is about $1. Use a pip value calculator to confirm for your exact pair and lot size.

Keep learning

More terms in the glossary.

Now that pips make sense, see how the desk turns them into structured trades with defined risk on every position.

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