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What is a Pip - Definition | Forex Dictionary

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Full Trader
(@fulltrader)
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A pip is the smallest unit of price change in a currency pair. In most pairs it equals the fourth decimal place (0.0001), except in pairs with the Japanese yen, where it is the second decimal (0.01). It is the standard way to measure how much the market moves.

Why it matters: the value of each pip determines how much you gain or lose for every price movement, depending on your position size. Calculating the pip value correctly is essential to manage the risk of each trade.



   
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