Forex Glossary
What Is Pip?
The smallest standard price move in a currency pair; on most pairs the fourth decimal (0.0001).
For example, if EUR/USD moves from 1.1050 to 1.1051, that is a 1-pip move. On a standard lot, 1 pip is usually worth ~$10.
Risk warning. Leveraged forex trading carries high risk and in Türkiye may only be offered by SPK-authorised intermediaries; leverage is capped at 1:10 (half of that may apply if the initial margin at account opening is below TRY 50,000). This content is not investment advice; user statements belong to their authors.
How much is a pip exactly?
A pip is the smallest standard price move in a currency pair. On most pairs it is the fourth decimal (0.0001); on JPY pairs the second (0.01). Some platforms show one more digit — a "pipette", one tenth of a pip.
A pip is an absolute step, not a percentage. So "I made 10 pips" alone does not say how much you made; the amount depends on lot size.
What determines pip value?
The same 10-pip move is small on a 0.1-lot position and ten times larger on a 1-lot position. Three things set pip value: trade size, the pair's quote currency and the current rate.
Our pip value calculator gives this before you trade. Knowing your risk in money rather than pips is a precondition for choosing a meaningful stop-loss distance.
How pips relate to cost
The spread is measured in pips too: a 1.2-pip spread means you start that far behind the moment you open. In short-term trading this cost accumulates quickly.
When assessing total cost, weigh the spread together with commission and, if you hold overnight, swap — all three come from the same pocket.