What Is a Pip?
A pip (Figure 1-7) is the smallest value by which a currency
may fluctuate in the forex market. Pip stands for “price in percentage”
and sometimes is referred to as a “tick.” Let us see
how this works.
• A move from EUR/USD 1.5555 to 1.5550 is referred to as a
5-pip move.
• A move from USD/JPY 113.00 to 113.05 also is referred to
as a 5-pip move, since the yen is recorded only out to two
decimal places.
It is a good idea to do the math and know what a pip
equates to in terms of the base currency one is trading. For
most scenarios, the pip is equal to 0.0001, or 0.01 percent. In
types of financial markets
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