Pips — the smallest move that matters

A pip is just the smallest standard step a currency pair's price usually moves in. For most pairs, it's the 4th number after the decimal point.

Example: EUR/USD moves from 1.0850 to 1.0851 — that's a 1 pip move. It sounds tiny because it is tiny. Pips only turn into real money once you're trading a proper position size, which is exactly what Module 2 covers.

Gold (XAU/USD) is a bit different — a pip there is usually counted as a $0.10 or $1 move, depending on the broker. Always check how your specific broker counts it before you trade.

Not every pair counts pips the same way. Most pairs use the 4th decimal place, but pairs involving the Japanese Yen (like USD/JPY) use the 2nd decimal place instead, because of how the Yen is priced relative to other currencies. This trips up a lot of beginners the first time they trade a Yen pair and the numbers look completely different.

Some platforms also show a 5th decimal place — that fraction of a pip is called a "pipette," and it's mostly there for more precise pricing, not something you need to calculate by hand. What actually matters day to day is the standard pip, since that's what most stop losses, targets and pip-value calculations are built around.