Pip

A pip is the smallest conventional increment by which a currency pair price is quoted, and it is the building block for measuring moves, spreads, stop distances, and profit or loss. For most pairs (like EUR/USD or GBP/USD) one pip equals 0.0001; for JPY pairs (like USD/JPY) one pip equals 0.01. Many brokers also quote a fractional "pipette" — a tenth of a pip — shown as a fifth decimal place. The cash value of a pip depends on the pair and your position size: on a standard lot of EUR/USD it is about $10, on a mini lot about $1, and on a micro lot about $0.10. Thinking in pips keeps your risk and targets comparable across different pairs and price levels.

In plain English — A pip ("percentage in point") is the standard unit traders use to measure how far a currency pair has moved. For most pairs it is the fourth decimal place, so a move from 1.1000 to 1.1001 is one pip. For pairs quoted against the Japanese yen it is the second decimal place instead. Pips let you talk about price changes and your results in a consistent way regardless of the actual price level.

EUR/USD moves from 1.1000 to 1.1020 — that is a 20-pip move. On one standard lot (100,000 units), each pip is worth about $10, so the move is worth roughly $200.