The smallest standardized price move on a forex pair.
A pip (from "percentage in point") is the smallest standardized price move on a forex pair. For most pairs, one pip equals 0.0001 of the quote currency. For JPY pairs, one pip equals 0.01.
Pips are how traders measure profit, loss, and spread. A 10-pip move on EUR/USD with a 1-lot position is worth 100 USD. The spread your broker quotes is denominated in pips. Position-size calculators use pips to back out the right lot size from your risk %.
EUR/USD moves from 1.0850 to 1.0855 — a 5-pip rise.
On a 1-lot long position, that's 100,000 × 0.0001 × 5 = $50 profit.
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