Pip

Pip stands for “Percentage In Point.” It is a standard measure of the exchange rate movement of every pair traded.

Pips are typically counted from the 4th decimal place of a currency pair, for example GBP/USD = 1.38680 when the price moves up to 1.38690, that is, the price moves by 1 pip.

However, there are differences in the counting of decimal places in other currency pairs and precious metals:

• Currency pairs with JPY count pips from the 2nd decimal place e.g. USD/JPY = 110.135
• If it is a precious metal such as gold, pips are counted from the 1st decimal place, e.g. XAU/USD = 1890.52

Some traders prefer to use the word Pip instead of profitable monetary terms. For example, Mr. A made 90 pips this time, the amount of money depends on the size of the order.

The advantage of talking profit with Pip is that it gives a consistent picture of how much profit can be kept from the price chart. without paying attention to money.