Glossary · Forex

Pip

The standard unit of price change in forex: 0.0001 for most pairs and 0.01 for pairs quoted in Japanese yen.

By Sky Trade editorial teamUpdated November 5, 2026

A pip (short for “percentage in point” or “price interest point”) is how forex traders measure moves. EUR/USD rising from 1.0850 to 1.0870 has moved 20 pips. For yen pairs the pip is the second decimal: USD/JPY moving from 150.20 to 150.45 is 25 pips.

Many feeds show one more digit, a fractional pip or pipette: 1.08503 has five decimals, and the last one is a tenth of a pip. Don't mistake a move of 10 in the last digit for 10 pips — it is one.

In conventional forex trading, pip value multiplied by position size gives the profit or loss. In fixed-payout Higher/Lower trades pips don't scale the result: a win by 0.1 pip and a win by 50 pips pay the same. That changes how you should think about moves. A big expected move is no better than a small one if the direction at expiry is uncertain, and a tiny move your way is still a full win.

Pips remain the handiest way to describe volatility and distances to levels, as in “ATR is 8 pips on M5”. See quote currency and ATR.

Example

You open Higher on GBP/USD at 1.26400 and it expires at 1.26402, just 0.2 pip higher. The trade earns the full payout, exactly as if the price had risen 30 pips.

Related terms

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