What is a pip in forex?

A pip in forex is the standard unit of price movement: 0.0001 on most currency pairs and 0.01 on pairs quoted in Japanese yen. When EURUSD moves from 1.1350 to 1.1375, it has moved 25 pips.

The word is usually expanded as “percentage in point”, sometimes as “price interest point”. Traders use pips for stops, targets and spreads because a pip count does not depend on trade size: a 25-pip stop is 25 pips on 0.01 lot and on 1.00 lot.

Pip size in forex, by pair

Many brokers quote one decimal more than the pip: five digits on EURUSD, three on USDJPY. That extra digit is a tenth of a pip, often called a pipette or fractional pip. MT5 itself counts in points, the smallest step a symbol is quoted in, so on these pairs 1 pip = 10 points.

Worked example: counting pips and what they are worth

The pip count is the same for everyone. The money it represents depends on the lot size, the pair and your account currency. The pip value calculator does that conversion for 28 pairs, gold, silver and index CFDs.

Where pips show up in MT5

MT5’s own numbers are in points, not pips. Prices in Market Watch (Ctrl+M) carry the symbol’s full number of digits. The Spread column (right-click Market Watch → Columns → Spread) and the Spread and Stops level fields in a symbol’s Specification window are in points (MT5 help: Market Watch). To read a EURUSD spread of 12 points as pips, divide by 10: 1.2 pips.

Common mistake: mixing pips and points

A setting, a signal or a web page may give a distance in pips or in points, and reading one as the other is a tenfold error. A stop setting of “20” is 2.0 pips if it means points and 20 pips if it means pips. Check the unit before trusting the number. How to calculate lot size shows how to write a stop out in pips, points and price so the three can be checked against each other.

Gold, silver and index CFDs have no standard pip at all. For those, count the distance in price or in points; the gold lot size calculator covers gold’s two pip conventions.

Pips and automated trading

An Expert Advisor does not need pips. PipWarden sizes each trade from the tick size and tick value that MT5 reports for the symbol at your broker, so the same sum works on forex, gold and indices without a pip convention. Its optional spread limit per pair is set in points, the unit MT5 uses. See how it works.