What is a “pip”?
Pip stands for “percentage in point”. You may sometimes hear “pips” referred to as “points”. That is, a pip is the smallest available unit of price for a currency. It’s the last decimal point shown in every exchange rate or currency pair.
The majority of currencies have a pip value of 0.0001. So USD/CHF bought at 1.2475 and sold at 1.2489 would make you 14 pips. The most common exception is USD/JPY. In this currency pair a pip is equal to 0.01 because there are only two decimal places.
A record of earnings or loss for any Forex trading activity is usually stated in number of pips.
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