WHAT IS PIP
PIPS or Percentage in Points refers to the unit of measurement for the difference in movement from one price level to another. Generally, forex currency pairs initially have 4 decimal points and 2 decimal points for the Yen pair.
For example, you BUY EUR / USD at the price of 1.1200. If the current price is at 1.1201, this means the EURUSD price has risen by 10 pips. This also means that you are making a profit of 1 pip.
And for the Yen pair, you buy USDJPY at 100.00. Suppose the price rises to 100.01, this means that the USDJPY price has increased by 1 pip.
Along with the development of financial technology, many brokers are using up to 5 decimal points and 3 decimal points for the Yen currency pair.
Basically, these brokers use ‘fractional pips’ or so-called ‘pipettes’.
For example, you BUY EUR / USD at 1.12000. If the current price is at 1.12013, this means that the EURUSD price has increased by 13 pipettes/point or 1.3 pips.
And if the Yen pair, you buy USDJPY at 100,000. For example, the price goes up to 100.013, this means that the USDJPY price has increased by 13 pipettes/point or 1.3 pips.
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