Values and examples on how to calculate PIP

DEFINITION

For any currency pair, a pip is the smallest unit of price fluctuation. It’s 0.01 Yen for pairs with the JPY as the counter currency. It’s 0.0001 of the counter or quotation currency for all other pairs.

For Example:

For the EURUSD

and most other pairs, movement from 1.4000 to 1.4001 is one pip.

For the USDJPY,

a movement from 80.00 to 80.01 is one pip.

It’s cash value is always expressed in terms of the quotation currency (the one on the right), which you then convert to the currency in which your account is denominated using the currency pair price, which is the current exchange rate.