What is pip in Forex Exchange?

Before you start to trade in Forex, you must understanding what is called Pip. Basically, Pip is an unit of measurement in Forex Market, any winning trade or losing trade also count in Pips. A pip will be the smallest unit or price that increase or decrease in the currency pair. There are some others who calling them as Point also.

Majority of the currencies in the market measure a pip is 0.0001 of a cent. Let me evaluate this some example and you will be able to understand. Let said you buy a currency worth 1.3211 and it increased to 1.3220, meaning that you have won 19 pips. Usually a pip will cost you USD10 and in this case you will win USD190.

The example stated above was one of the way that we calculate Pips, just remember 1 pip = 0.0001.

Hope you can get the picture correctly.