Pips Pipettes and Price Movements — Market Fundamentals

What Is a Pip?

A pip (percentage in point) is the standard unit used to measure price movement in forex. For most currency pairs, a pip is the fourth decimal place, equal to 0.0001. For pairs involving the Japanese yen, a pip is the second decimal place, equal to 0.01, because yen-based pairs are quoted with fewer decimal places.

[Read the lesson: Pips, Pipettes, and Price Movements](/learn-to-trade/market-fundamentals/pips-pipettes-and-price-movements)

Calculating Pip Movement

To find how many pips a price has moved, subtract the old price from the new price, then express the difference in pips. For EUR/USD moving from 1.0850 to 1.0875, the difference is 0.0025, which equals 25 pips.

For USD/JPY moving from 149.50 to 149.80, the difference is 0.30, which equals 30 pips, since each pip there is worth 0.01.

**Two Worked Examples:** EUR/USD: 1.0875 − 1.0850 = 0.0025 = 25 pips. USD/JPY: 149.80 − 149.50 = 0.30 = 30 pips (because a JPY pip is 0.01, not 0.0001).

[Read the lesson: Pips, Pipettes, and Price Movements](/learn-to-trade/market-fundamentals/pips-pipettes-and-price-movements)

What Is a Pipette?

Many brokers quote prices with one extra decimal place for more precision, called a pipette, equal to one-tenth of a pip. For EUR/USD, this is the fifth decimal place (0.00001). A price of 1.08507 means 7 pipettes beyond 1.0850, useful for very fine price tracking but less important for big-picture analysis.

[Read the lesson: Pips, Pipettes, and Price Movements](/learn-to-trade/market-fundamentals/pips-pipettes-and-price-movements)