What’s a Pip & Why It Matters in Forex Trading | Rabab Markets
If you’re new to forex trading, you’ve probably come across the term “pip”. But what exactly is a pip—and why does it matter?
What is a Pip?
A pip (short for “percentage in point” or “price interest point”) is the smallest price movement that a currency pair can make in the forex market. For most major currency pairs, a pip is equal to 0.0001 (fourth decimal place). For example, if the EUR/USD moves from 1.1000 to 1.1001, that’s a 1 pip change.
Why Do Pips Matter?
Pips are crucial in forex trading because they help traders:
- Measure price movements
- Calculate profits and losses
- Set stop-loss and take-profit orders
At Rabab Markets, we offer tight spreads, which means fewer pips between bid and ask prices—allowing you to trade more efficiently.
How to Use Pips in Trading
Let’s say you’re trading 1 standard lot (100,000 units) of EUR/USD:
- If the price moves 10 pips in your favor, you earn $100.
- If it moves against you, that’s a $100 loss.
Understanding pips helps you manage risk, analyze trades, and build a solid trading strategy.
Trade Smarter with Rabab Markets
At Rabab Markets, we provide the tools, education, and support you need to master forex trading—starting with the basics like pips. Whether you’re a beginner or an experienced trader, we’re here to help you grow.
👉 Ready to trade smarter? Visit rababmarkets.com and open your account today!
