Pips
The standard unit of price movement on the forex market. On most pairs quoted to four decimal places, one pip equals 0.0001.
Definition
A pip is the standard unit of price movement in forex — on most pairs quoted to four decimal places, 1 pip = 0.0001 (on JPY pairs it is usually 0.01). Pips let you measure the result, the spread and the distance to your stop-loss regardless of position size; the monetary value of a pip depends on the lot and on the pair.
Example
EUR/USD moving from 1.0850 to 1.0870 is 20 pips. With 0.10 lots you work out the value of one pip in PLN/USD from the broker’s calculator and then know whether a 20-pip stop fits inside your risk budget.
Anti-example / common mistake
Confusing a pip with a tick on indices or futures, or with a “point” on a platform that shows five decimals (a pipette). Without converting to money, “20 pips” says nothing about risk.