What is a Forex Pip?

pip

Simply put, a forex pip is the smallest price change that a currency pair can make. More precisely, a pip is the change in the fourth digit in a forex quote. Let us look at an example. If you buy the EURUSD pair at 1.3902 and sell it at 1.3905, you have made a (5-2) 3 pip profit, otherwise known as a 3 pip win. On the other hand, if you buy at 1.3640 and sell at 1.3634, you have made a 6 pip loss. I hope you can calculate and see how we have arrived at that figure.

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