What is a PIP Forex Market Basic information

In the context of Forex trading, PIP stands for "percentage in point" or "price interest point." It represents the smallest price movement in the exchange rate of a currency pair. PIPs are typically used to measure the change in value between two currencies.

For most currency pairs, a PIP is usually the fourth decimal place in the exchange rate. However, for currency pairs involving the Japanese Yen, it's the second decimal place. PIP movements are essential for traders to assess price changes, calculate profits or losses, and set stop-loss and take-profit levels in their trades.