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A Beginner’s Guide to Pips in Forex Trading

When starting out in forex trading, one of the first things you’ll hear is the term “pip.” It’s used everywhere — in profit calculations, trading strategies, spreads, and even in trader conversations.

But what exactly is a pip? And more importantly, how do you measure it? Let’s break it down in the simplest way possible.

What Is a Pip?

A pip stands for “Percentage in Point.”

It’s the smallest possible price movement in the exchange rate of a currency pair.

For most currency pairs, 1 pip = 0.0001 (that’s four decimal places).

For example:

  • ● If EUR/USD moves from 1.1050 to 1.1051, it has moved 1 pip.

For pairs involving the Japanese Yen (JPY), 1 pip is 0.01 because they are quoted with only two decimal places.

Why Do Pips Matter?

Pips are essential in forex because they help you:

  • ● Measure price movements
  • ● Calculate profits or losses
  • ● Compare spreads
  • ● Set stop-loss and take-profit points

Whether you’re a beginner using a Standard Account or a pro using an ECN Account, you’ll always deal in pips when trading on TransXMarket.

How to Measure Pip Value

The value of a pip depends on three things:

  • 1. The currency pair you're trading
  • 2. The lot size (volume) of your trade
  • 3. The base currency of your account (usually USD)
  • ✔️ For a Standard Lot (100,000 units): to assist you at every step
  • ● 1 pip = $10
  • ✔️ For a Mini Lot (10,000 units):
  • ● 1 pip = $1
  • ✔️ For a Micro Lot (1,000 units):
  • ● 1 pip = $0.10

    • Example:

    You're trading 1 standard lot of EUR/USD.

    • ● Buy at 1.1000, sell at 1.1015
    • ● That’s a 15 pip gain

👉 15 pips x $10 = $150 profit

What About Spreads?

The spread is the difference between the buy and sell price — and it’s measured in pips too.

At TransXMarket, we offer:

  • ● Standard Account
  • ● Pro Account – Spreads from 0.8 pips
  • ● ECN Account – Raw spreads from 0.0 pips

Tighter spreads = Lower costs = More profit potential for you.

Monitoring Pips on TransXMarket

When you trade with us on MT5, our platform shows pip movements in real-time.

You can:

  • ● View pip differences on charts
  • ● Set SL/TP levels based on pip value
  • ● Use pip-based indicators to plan trades
  • ● Track pip profit/loss automatically

Whether you're trading with leverage or on a swap-free Islamic account , pip tracking stays consistent and easy.

Final Words

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