What Is a Pip in Forex?

For most pairs (EUR/USD, GBP/USD, AUD/USD etc.): 1 pip = 0.0001

If EUR/USD moves from 1.0850 to 1.0860, that is a 10-pip move.

JPY pairs are the exception: USD/JPY, EUR/JPY, GBP/JPY — 1 pip = 0.01 (the second decimal place)

If USD/JPY moves from 149.50 to 149.60, that is a 10-pip move.

Pipette (fractional pip): Most brokers quote to 5 decimal places (4 for JPY). The 5th decimal is a pipette = 0.1 pip. EUR/USD quoted at 1.08503 — the "3" is a pipette.

Gold (XAU/USD): Priced in dollars per troy ounce. 1 pip = $0.01 (1 cent). Movement from $2,300.00 to $2,300.10 = 10 pips. But the dollar value per pip depends heavily on lot size.

Pip value depends on: lot size, currency pair, and your account currency.

Formula for USD-quoted pairs (EUR/USD, GBP/USD etc.) in USD account:
Pip value = Lot size × 0.0001

| Lot Type | Units | Pip Value (EUR/USD, USD account) |
|----------|-------|----------------------------------|
| Standard | 100,000 | $10.00 |
| Mini | 10,000 | $1.00 |
| Micro | 1,000 | $0.10 |
| Nano | 100 | $0.01 |

For USD/JPY: Pip value = (Lot size × 0.01) ÷ current USD/JPY rate
At USD/JPY = 150.00: Standard lot pip value = (100,000 × 0.01) / 150 = $6.67/pip

XAU/USD (Gold): At 0.01 lot (1 oz): 1 pip = $0.001. At 1 lot (100 oz): 1 pip = $1.00. Most gold traders use 0.1–1 lot — 10–100 pips/lot.

Trade 1: Buy 0.1 lot EUR/USD at 1.0850, sell at 1.0900
- Move: 50 pips
- Pip value at 0.1 lot: $1.00/pip
- Profit: 50 × $1.00 = $50

Trade 2: Sell 0.5 lot GBP/USD at 1.2650, buy back at 1.2580
- Move: 70 pips in your favor
- Pip value at 0.5 lot: $5.00/pip
- Profit: 70 × $5.00 = $350

Trade 3: Buy 0.01 lot XAU/USD (gold) at $2,300, sell at $2,340
- Move: $40.00 (which is 4,000 pips at $0.01/pip for this lot size)
- Profit: $40.00 × 0.01 lot × 100 (oz/lot) × $0.01/pip... easier: just (exit − entry) × lot in oz = $40 × 1 oz = $40

For gold, most traders calculate profit as (exit price − entry price) × ounces traded.