Forex Pips & Pipettes
A pip is the standard unit for measuring how much a currency price moves. Traders talk in pips, not in dollars, because pips work the same no matter how big the trade is.
What is a Pip?
Pip stands for "percentage in point" (some say "price interest point"). For most currency pairs, one pip is the fourth decimal place: 0.0001.
Example
EUR/USD moves from 1.0850 to 1.0851.
That is a move of 1 pip (0.0001).
From 1.0850 to 1.0900 is 50 pips.
JPY Pairs Are Different
When the Japanese yen is the quote currency (for example USD/JPY or EUR/JPY), the price has only two or three decimals. For these pairs one pip is the second decimal place: 0.01.
| Pair | Example price | 1 pip | Move of 1 pip |
|---|---|---|---|
| EUR/USD | 1.0850 | 0.0001 | 1.0850 → 1.0851 |
| GBP/USD | 1.2700 | 0.0001 | 1.2700 → 1.2701 |
| USD/JPY | 150.00 | 0.01 | 150.00 → 150.01 |
| EUR/JPY | 162.75 | 0.01 | 162.75 → 162.76 |
Note: Gold (XAU/USD), indices and crypto do not follow a single pip standard. Brokers define them differently, so always check your platform's contract specifications.
What is a Pipette?
Most brokers quote one extra decimal place. That extra digit is a pipette, or fractional pip. One pipette is one tenth of a pip.
Example
EUR/USD quoted as 1.08503. The last digit, 3, is pipettes.
A move from 1.08503 to 1.08513 is 1 pip (10 pipettes).
USD/JPY quoted as 150.125: the 5 is pipettes.
Common mistake: Beginners often read 1.08503 → 1.08513 as "10 pips". It is 1 pip. Count pips at the 4th decimal (2nd for JPY pairs), not the last digit.
How to Count Pips
Example: GBP/USD
Entry: 1.2650 Exit: 1.2712 Move: 1.2712 − 1.2650 = 0.0062 Pips: 0.0062 ÷ 0.0001 = 62 pips
Example: USD/JPY
Entry: 149.80 Exit: 150.35 Move: 150.35 − 149.80 = 0.55 Pips: 0.55 ÷ 0.01 = 55 pips
How Much is a Pip Worth?
A pip on its own has no money value. Its value depends on how big your trade is (the lot size) and which pair you trade.
For pairs where the USD is the quote currency (EUR/USD, GBP/USD, AUD/USD, NZD/USD), the pip value is fixed in dollars:
| Lot size | Units | Pip value (xxx/USD) |
|---|---|---|
| Standard lot (1.00) | 100,000 | $10.00 |
| Mini lot (0.10) | 10,000 | $1.00 |
| Micro lot (0.01) | 1,000 | $0.10 |
| Nano lot (0.001) | 100 | $0.01 |
For other pairs, you convert the pip value from the quote currency into your account currency.
Example: USD/JPY, 1 standard lot
Pip value in JPY = 0.01 × 100,000 = ¥1,000 Convert to USD = ¥1,000 ÷ 150.00 = $6.67 per pip
Pips on a Chart
On the chart below, price climbs from the support line to the resistance line. Measure the distance between the two lines in pips to know how much room a trade has.
Tip: Think in pips when planning a trade ("my stop is 20 pips away"). Then use position sizing to turn those pips into a money amount you are happy to risk. You'll learn this in Position Sizing.
Test Yourself With Exercises
EUR/USD moves from 1.1020 to 1.1045. How many pips is that?
- 2.5 pips
- 25 pips
- 250 pips
What is one pip on USD/JPY?
- 0.01
- 0.0001
- 1.00
GBP/USD moves from 1.27003 to 1.27013. How far did it move?
- 10 pips
- 0.1 pips
- 1 pip
You trade 1 mini lot (0.10) of EUR/USD. What is each pip worth?
- $10
- $1
- $0.10