A pip is the smallest standard unit of price movement in a currency pair.
A pip — short for “percentage in point” — is the standard way to measure how much a price has moved in forex trading. It represents a small, fixed increment of change, allowing traders to describe price movements precisely and consistently. Because individual pips are small, traders use them as a common language for measuring gains, losses, and the distance between price levels. Understanding pips is a basic building block for reading the markets and for calculating how much a given move is actually worth.
Think of a pip like a centimetre on a ruler. One centimetre is a small, fixed unit — but it lets everyone measure and describe distance in the same way. A pip does the same job for currency prices: it’s the small, standard unit traders use to talk about how far a price has moved.
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