What Is a Pip?
A pip, short for "percentage in point" or "price interest point," is the standard unit of measurement used to express the change in value between two currencies in the forex market. It is one of the most fundamental concepts every trader should understand.
What Does a Pip Represent? (More details)
What Does a Pip Represent? (More details)
In most currency pairs, a pip is equal to a 0.0001 price movement.
For example:
If EUR/USD moves from 1.1050 to 1.1051, that’s a 1 pip move.
The exception to this rule is JPY pairs (e.g., USD/JPY), where a pip is equal to 0.01 due to the lower decimal convention in yen pairs.
Pip Value Explained (More details)
Pip Value Explained (More details)
The monetary value of a pip depends on three main factors:
The currency pair you're trading
The lot size
The base currency of your account
Example (Standard Account, USD-based):
Lot Size | Pip Value (for most USD pairs) |
1.00 (Standard) | $10 per pip |
0.10 (Mini) | $1 per pip |
0.01 (Micro) | $0.10 per pip |
So, a 10-pip move on 1.00 lot of EUR/USD = $100 gain or loss, depending on the trade direction.
What Is a Fractional Pip (Point)?
Most platforms, including MetaTrader 4 and 5 (MT4/MT5), show prices with an extra decimal place, known as a fractional pip or point:
For EUR/USD, you may see prices like 1.10508
The last digit (8) is a fractional pip, or 1/10 of a pip
This allows for more precise pricing and tighter spreads.
Why Are Pips Important?
Pips help you:
Measure market movement and volatility
Calculate profit and loss
Set accurate stop loss and take profit levels
Evaluate risk per trade
Understanding how pips translate to real-dollar values is essential to managing your trades and risk effectively.
Tracking Pips on Blueberry
On the MT4 or MT5 platform, pips are reflected in the price movement of your charts and orders. You can calculate your profit or loss using the number of pips gained or lost multiplied by your lot size.