Forex Terminology

PIP

Every trader in the Foreign Exchange ‘FOREX’ hopes to make a profit from something called ‘PIP’. It may sound silly, but gains in pips can potentially make you over wealthy .

Take your time with this information, as it is required knowledge for all Forex traders.

What is a PIP ?

Pips stands for ‘PERCENTAGE IN PIONTS’.

In the Forex trading, a ‘PIP’ is a unit of measurement which represents the smallest change in the price of currency or a currency pair. In the stock markets this is a classified as a ‘POINT’.

As a result, some folks refer to pips as points. Pips are the last decimal point in an exchange rate or currency pair.

USD/JPY: 110.78
.01 divided by exchange rate = pip value
.01 / 110.78= 0.0090269This looks like a very long number but later we will discuss lot size.