Understanding Price Movement in the Forex Market | BR Trading

A "pip" is the smallest standard unit for measuring the price movement in currency pairs.
The word "PIP" is an acronym for "Percentage in Point."
In most currency pairs, one pip is the fourth decimal place (0.0001).

However, for pairs that include the Japanese Yen, gold, silver, oil, and gas, a pip is represented by the second decimal place (0.01).

For example, if the EUR/USD pair moves from 1.0962 to 1.0965, it means the pair has moved up 3 pips.
The same concept applies to JPY pairs, gold, silver, oil, and gas.

Let’s take the USD/JPY pair as an example:
Assume the exchange rate is 115.75, and it moves up 4 pips — the new rate would be 115.79.

⚠️ Note:
Trading platforms today display exchange rates with five decimal places for most currency pairs, and three decimal places for JPY pairs, gold, silver, oil, and gas.

The extra decimal digit is a fraction of a pip.


For example, if the EUR/USD rate is 1.08471 and it increases by half a pip, the new rate would be 1.08476.

📘 Stay tuned for the next lesson to learn more about the Forex market.