The number itself
On most pairs one pip is 0.0001. A move from 1.0850 to 1.0851 is one pip. On yen pairs, which are quoted to two decimals, one pip is 0.01, so a move from 150.00 to 150.01 is one pip. Gold is normally taken as 0.10 per pip and silver as 0.01. Those four conventions cover almost everything a retail trader touches.
Pips versus points
Most platforms show one more decimal than the pip: 1.08501 rather than 1.0850. That last digit is a point, sometimes called a pipette, and ten of them make one pip. A price flickering through points looks like fast movement and usually is not. Broker spread is often quoted in points too, so 8 points is 0.8 pips.
A pip is not an amount of money
It is an amount of price. Turning it into money needs the position size and the pair: fifty pips on 0.01 lots and fifty pips on 5 lots are the same movement and wildly different outcomes. This is the step beginners skip, and it is why a trade can "only move thirty pips" and still empty an account.
Why traders talk in pips at all
Because it makes strategies comparable across account sizes. "A thirty pip stop" means the same thing to someone trading micro lots and someone trading standard lots, where "a three hundred dollar stop" does not.
In short
| Most pairs | 1 pip = 0.0001 |
|---|---|
| Yen pairs | 1 pip = 0.01 |
| Gold (XAU/USD) | 1 pip = 0.10 |
| Point / pipette | One tenth of a pip |
Common questions
How much is one pip worth?
On a standard lot of a pair quoted in dollars, ten dollars. On a mini lot, one dollar. On a micro lot, ten cents. Change the pair or the account currency and the figure changes, which is what the pip value calculator is for.
My broker quotes five decimals. Which one is the pip?
The fourth. The fifth is a point. If your platform shows the price moving in tenths, you are watching points, not pips.
Is a pip on gold really 0.10?
That is the most common convention and the one used throughout this site. Some brokers call 0.01 a pip on gold, which changes every risk figure by a factor of ten. Check yours before sizing a gold position.
Trading forex and CFDs on margin carries a high level of risk. Most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade.