What is 1 pip equivalent to?

The calculation of a pip is based on the fourth decimal place for most currency pairs. This standard applies universally across different currency exchanges and trading platforms.

An exception to this rule exists for currency pairs that involve the Japanese yen. In such cases, one pip is equivalent to 0.01.

In the context of currency trading, the value of a pip holds significant importance.

For currency pairs with the Japanese yen, the pip value is calculated based on the second decimal place. This makes a notable difference in the way profitability or loss is determined for these specific currency pairs.

The significance of pips in forex trading cannot be overlooked. They serve as the fundamental unit of measurement for determining the profitability or loss of a trade.