Pips and Points
Price movement gets measured differently depending on what you’re trading, and mixing up the units is an easy way to badly misjudge how big a move, or a risk, is. A price move measured in discrete units, whether that’s pips on a forex pair or points on an index. Pips, for forex A pip is the standard unit of movement in most forex pairs, and for most pairs it’s the fourth decimal place, so EURUSD moving from 1.0850 to 1.0860 is a 10 pip move. Yen pairs are the exception: they’re quoted with fewer decimal places, so a pip there is the second decimal, meaning USDJPY moving from 150.00 to 150.10 is also a 10 pip move even though the numbers look different. ...