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Forex Basics

Pip

The smallest price movement in a currency pair, typically the fourth decimal place.

Full Definition

A pip (percentage in point) is the smallest standardized price movement in forex trading. For most currency pairs, a pip equals 0.0001 (the fourth decimal place). For JPY pairs, a pip is 0.01 (the second decimal place). Pips are used to measure price changes and calculate profits or losses. For example, if EUR/USD moves from 1.1050 to 1.1051, it has moved 1 pip.

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