HomeEducationHow to Trade ForexWhat is a pip?

What is a pip?

Pips Explained? 

A pip which is generally known as a percentage in point is one of the most recognized terms in the world of financial trading. This represents the smallest incremental movement in the price of the value of an instrument. Depending on the instrument which is being traded the pip location varies. In Forex trading and to use the USD which is the most quoted currency within the markets the pip is located to the 4th decimal place $0.0001. 

Each move which take places in USD related currency pairs will be the equivalent of the following. If the market moves from $0.0001 to $0.0002 that will be a 1 pip move. To $0.0010 will be a 10 pip move. $0.0100 will be a 100 pip move and so on.

Below we look at how the pip can be found on the trading platform and its general uses.

How is a pip used?

The pip is the main metric traders use in calculating their profit or losses. The pip number also helps a trader outline the cost of the trade prior to entering the market.

On your trading platform you will usually have a market watch which shows you the various markets being traded. On the market watch you will see the prices being quoted, and will notice at latter numbers are usually the pips.

Best Brokers for Tight Pip Spreads

The best brokers for tight pip spreads are usually those who allow scalping, have a range of liquidity providers, good execution speeds and generally reliable. Trading volatile markets can be risky and expensive, so brokers would need to offer the above and more, to help ease your mind when trading with them at the best cost.

Here is our list of the best brokers for breakout trading:

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$50
Exclusive promotion
Our score
9.3
Trade on popular Crypto markets
Go long or short on cryptos from 10p a point
A trading partner you can trust
Start trading
Description:
Founded in 1999, part of GAIN Capital Holdings. Licensed in highly regulated jurisdictions, FCA, IIROC, NFA, CFTC, CIMA,FSA. Payment methods ACH, debit card, bank wire transfer. $50 minimum deposit.
Payment methods
Debit Card, Bank Wire, ACH, Credit Card, PayPal
Full regulations list:
NFA, CFTC, FCA, FSA, IIROC, CIMA, FFA Japan, MAS, SFC of Hong Kong
Forex trading involves significant risk of loss and is not suitable for all investors.
3
Min. Deposit
$20
Exclusive promotion
Our score
8.7
Margin Trading with full legal compliance
Cryptocurrency staking
Various Payment options
Start trading
Description:
Cex.io offers exchange of fiat currency for Bitcoin Ethereum, Tether, and 23 other cryptocurrencies, as well as Bitcoin/Ethereum trading against the USD.
Payment methods
Credit Card, Debit Card, Wire Transfer, Cryptocurrencies, Skrill
Full regulations list: