What is a "PIP"

[ironman2000]

I have just been asked a question:

What is a "PIP" and here is the answer to their question.

As a new Forex trader, one of the most important things you will need to learn is how to figure out the value of a pip for any currency pair. A pip is the smallest measure of value in a currency pair in Forex, so it's critical that you understand this concept

When someone is saying "30 pips," they're talking about thirty units of value in a trade. Both profits and losses are measured in pips, though a pip for USD/JPY is not the same value as a pip for USD/CAD

The simplest way to put it is this: one pip is one unit of the smallest measured decimal place. For example, if you are trading USD/JPY at 114.95, then one pip is .01 Yen, since that is the smallest decimal place of measurement used in this pair. The JPY is measured in two decimal spaces, although almost all other currencies are measured in four decimal places

If anyone has any other questions about Forex I will be more than welcome to answer them.

Have a great weekend..........