The pip and its value

Trading Terminology — Lesson 2 of 8

A pip is the unit of measurement for price movement. When a trader says “I made 40 pips”, they are describing a distance price travelled, not an amount of money — the money depends on their position size.

Where the pip sits

Instrument	The pip	Example
Most currency pairs	the fourth decimal place (0.0001)	1.0850 to 1.0851 = one pip
Yen pairs	the second decimal place (0.01)	150.20 to 150.21 = one pip
Gold	0.10 at most brokers	2000.0 to 2000.1 = one pip
Indices	usually a whole unit	15000 to 15001 = one pip

02 — Lesson 2 of 8

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