Pips, points and ticks are all ways of measuring price movement. Mixing them up is one of the most common reasons beginners take positions that are far bigger than they think.
Pips in forex
For most pairs, a pip is the fourth decimal: EURUSD moving from 1.0850 to 1.0851 is one pip. For JPY pairs it is the second decimal: USDJPY from 150.25 to 150.26 is one pip. Many platforms show a fifth (or third) decimal, called a fractional pip.
Pip value
- Pairs quoted in USD (EURUSD, GBPUSD, AUDUSD): about $10 per pip per standard lot.
- USDJPY and USDCAD: the value depends on the exchange rate; roughly $6–8 per pip per lot at typical rates.
- Mini lot (0.1): one-tenth. Micro lot (0.01): one-hundredth.
Points on gold and indices
Gold is usually measured in dollars: a move from 2,400 to 2,401 is $1, worth $100 per standard lot of 100 ounces. Indices are measured in index points; the dollar value per point per lot depends on the contract, shown in the instrument specification.
Ticks on futures
Futures move in ticks of a fixed size with a fixed value. For example, the E-mini Nasdaq (NQ) moves in 0.25 ticks; the micro (MNQ) has one-tenth of the value of NQ. Always check the tick value before calculating a stop.