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Watch Your Pips Grow into a Lot More

28 December 2020, 06:26
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You’ve probably heard them a million times; “PIPs” and “LOTs” may be little but in the trading world they’re a BIG thing. You won’t understand trading until you understand them.

What the pip!?

PIP stands for “percentage in point” and is the smallest possible increment in a quote.

Example: GBP/USD has a rate of 1.5696 a PIP here would be 0.0001.
USD/JPY has a rate of 123.45 a PIP here would be 0.01.

So a PIP is essentially the last decimal place of quotation, most currency pairs will have a PIP being equal to 0.0001 as they are usually quoted to 4 decimal places. This isn’t always the case however, as we can see from the example above.

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