A pip — "percentage in point" — is the standard unit of price movement in forex. For most pairs it is the fourth decimal place: EUR/USD moving from 1.0850 to 1.0851 is one pip. For JPY pairs it is the second decimal (150.10 → 150.11), and for gold most platforms treat a move of 0.10 as one pip.
Why traders count in pips
Pips standardise conversation and risk. "Price moved 30 pips against me" means the same thing regardless of position size. Your stop loss distance, your target distance, and the day's total range are all naturally expressed in pips.
What a pip is worth
Pip value depends on position size. The anchors worth memorising for USD-quoted pairs: a standard lot (100,000 units) makes each pip worth about $10; a mini lot $1; a micro lot $0.10. So a 25-pip stop on one mini lot risks about $25.
The mistake beginners make
They pick a position size first, then discover what the pips cost. Professionals reverse it: decide the dollar risk (say 1% of the account), measure the stop distance in pips, and let those two numbers dictate size. That single reversal — covered fully in The 1% Rule — is most of what "risk management" means. The position size calculator on our homepage does this arithmetic instantly.
Education only — not financial advice. Trading carries risk of loss; never trade money you cannot afford to lose.
