Pip [singular] | pips [plural], pipettes, points and ticks are basic concepts in forex trading that traders use regularly to describe price changes. In the Forex market, traders buy or sell a currency the value of which is expressed in relationship to another currency. The exchange rate rises and falls by pips. Depending on the context, this unit of change is normally one basis point. Pip stands for “Percentage In Point”. It is a “point” for calculating profits and losses and represents the smallest incremental move an exchange rate can make. Most major currency pairs are priced to four decimal places. So, the smallest change is that of the last decimal point: 0.001. For example, if the EUR/USD pair moves from 1.1903 to 1.1904, that is a one-pip movement.