What's a Pip? (It's In Our Name)

A pip is the standard unit of movement in a currency pair — the market's inch. For most pairs it's the fourth decimal place: GBP/USD moving from 1.2700 to 1.2701 is one pip. Yen pairs are the exception — there it's the second decimal (USD/JPY 148.50 to 148.51).

Why traders count in pips

Saying "the pound went up a bit" is useless; saying "Cable's up 40 pips" tells every trader on Earth exactly how big the move was, instantly, regardless of position size. Pips are the market's shared ruler.

Pips are distance, not money

Here's what beginners tangle up: how much a pip is worth in pounds depends entirely on your position size. Forty pips on a tiny position is coffee money; the same forty on an oversized one can empty an account. Same distance, different consequences — position sizing (Risk School covers it properly) is what turns distance into acceptable risk.

Pipettes, briefly

Most brokers quote an extra decimal — a tenth of a pip, the pipette. Useful for precision, irrelevant for understanding. If your platform shows 1.27013, the pip count lives in the fourth decimal; the trailing digit is fine print.

Now you know what our name means: the insight is in the pips.

Educational content only — never financial advice. Most retail traders lose money. Capital at risk. 18+.