Trading glossary
Pip: meaning in trading
A pip is the standard unit a currency price moves in: 0.0001 on most pairs and 0.01 on yen pairs.
Prices on GBPUSD are quoted to four decimal places, plus a fifth digit on most platforms. A move from 1.3200 to 1.3201 is one pip. The fifth digit is a tenth of a pip, often called a pipette or a point.
On yen pairs such as USDJPY a pip is the second decimal place: 150.00 to 150.01.
Why it matters
Stops, targets and results are measured in pips so they mean the same thing whatever your account size. A 10 pip stop is the same idea on a £500 account and a £50,000 one; only the lot size changes.
Example: sell GBPUSD at 1.32283 and buy back at 1.31983. That is 30 pips of profit.
Learn more
Lesson: Pips and position size
Guide: What is a pip?
Free tool: Pip value calculator