Pip stands for «Point in Percentage.» It is the smallest unit of price movement in forex trading. The value of a pip varies depending on the currency pair being traded, but it is typically the fourth decimal place. For example, if the EUR/USD currency pair is trading at 1.2345, a one-pip movement would be to 1.2346 or 1.2344.
Pips are used to measure the change in the value of a currency pair over time. For example, if the EUR/USD currency pair moves from 1.2345 to 1.2355, it would have increased by 10 pips.
Pips are also used to calculate the profit or loss on a forex trade. For example, if a trader buys 1 lot of EUR/USD at 1.2345 and sells it at 1.2355, they would make a profit of 10 pips.
Pips are an important concept in forex trading. They are used to measure the change in the value of currency pairs, calculate the profit or loss on trades, and set stop-loss and take-profit orders.