What a pip actually is

Forex Foundations

The standard unit of movement

A pip is the standard unit of price movement in forex, normally the fourth decimal place, 0.0001, for most pairs. EUR/USD moving from 1.0850 to 1.0851 is a one-pip move.

Yen pairs are the exception

Yen pairs are the exception. Because the yen trades at a much smaller unit value, pip counting for pairs like USD/JPY happens at the second decimal place, 0.01, instead of the fourth.

Pipettes add extra precision

Many brokers now quote an extra, smaller digit called a pipette, a tenth of a pip. It adds precision, but the pip itself remains the standard unit traders actually think and plan in.