A pip is a price-movement unit designed to standardise how currency-pair changes are measured — for most pairs, a movement in the fourth decimal place (0.0001); for JPY pairs, the second (0.01).

Pip value converts price movement into money: on one standard lot of EURUSD, one pip is worth roughly $10, scaling linearly with lot size. This conversion is what makes risk calculable — a 30-pip stop on 0.5 lots of EURUSD risks about $150. Platforms quoting fractional pips (pipettes, a fifth decimal) display ten times more precision; misreading a pipette column as pips is a classic position-sizing error.