💹 Understanding Pips — The Language of Price Movement
💡 The Lesson
Every trader talks in pips — but few actually understand how powerful they are.
A pip might look small, but it’s the foundation of profit, loss, and precision in trading.
📏 What Is a Pip?
A pip (Point in Percentage) is the smallest unit of price movement in most currency pairs.
For most pairs, 1 pip = 0.0001.
Example:
EURUSD moves from 1.0850 → 1.0851, that’s +1 pip.
For JPY pairs, 1 pip = 0.01.
Example:
USDJPY goes from 150.20 → 150.30, that’s +10 pips.
💰 Why Pips Matter
They measure everything:
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Profit and loss
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Stop loss and take profit distance
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Volatility and risk
If your stop loss is 30 pips and your target is 60 pips, that’s a 1:2 risk/reward — simple math that defines long-term survival.
⚙️ How to Think in Pips, Not Money
New traders think in dollars.
Pros think in pips.
When you think in pips:
✅ You trade consistently regardless of account size.
✅ You focus on execution, not emotion.
✅ You can compare performance across strategies and pairs.
📊 Example:
Trade Size: 0.10 lot on EURUSD
1 pip = $1
Gain of 50 pips = +$50
Loss of 25 pips = –$25
Simple, predictable, and scalable.
🚀 Takeaway
If you don’t master pips, you don’t understand your risk.
Forget about money first — master the measurement.
Because every great trader speaks the same language: pips.
📢 Join my MQL5 channel for more trading fundamentals and real examples:
👉 https://www.mql5.com/en/channels/issam_kassas
