Pips Points and Ticks

What exactly is Pips, Points and Ticks? Pips Points and Ticks are terms used to define price changes in the financial markets. A point represents a small price change to the left of the decimal point. An investor might describe a stock price increase from USD 80 to USD 84 as a 4 points movement rather than a 4 dollar movement. 

A tick denotes the smallest price change to the right of the decimal points. The market has different tick sizes it could be 0.01, 0.001 or even 0.0001. 

A pip usually refers to the fourth decimal place of a price. If the EUR/USD pair moves from 1.1307 to 1.1308 that’s a 1 pip movement. However sometimes the term can be used for any possible price change regardless of the decimal place precisely like a tick. Pip term is the most used term by traders in the forex market.