A PIP in Forex trading is a key element connected to the value of one currency represented relative to another. The term “PIP” stands for “percentage in point” or “price interest point.” It is most commonly used to refer to the smallest possible change in the exchange rate of a currency pair. These currency pairs are quoted with bid and ask prices, typically rounded to four decimal places. A PIP provides a standardized way of expressing price changes in the Forex market, allowing traders to communicate and analyze currency price movements effectively. Any change in the exchange rate is measured in PIPs. As most currency pairs are quoted to four decimal points, the smallest whole unit shift in these pairs equals one PIP.
This course will teach you everything you need to know about PIPs and their uses in everyday Forex trading.
