Pip
In forex trading, a “pip” stands for “percentage in point” or “price interest point,” and it is the smallest unit of price movement for a currency pair. It represents the smallest incremental price change that can occur in the exchange rate between two currencies. Pips are a standardized unit of measurement used to quantify changes in price and to express profit and loss in forex trading. The value of a pip depends on the specific currency pair being traded and the size of the trade position (lot size). In most major currency pairs, the fourth decimal place represents a pip. However, in currency pairs involving the Japanese yen (JPY), where the exchange rates are typically expressed with two decimal places, the second decimal place represents a pip.
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