What is Forex Pip?
Price Interest point (Pip) is the term used in Forex market to represent the smallest price increment in a currency. It is often referred to as ticks or points in the market. The easiest way to understand Forex Pip is to look at that last number from the right in a currency.
If EUR/USD moved from 1.2225 to 1.2226 then it said to move up by 1 Pip. Note that there are 4 decimal places in EUR/USD, in case of crosses like USD/JPY there are only two decimal places 93.10. In case of USD/JPY if it moves from 93.10 to 93.11 then it is considered as 1 pip move.
Most ECN brokers have an extra digit known as Fractional Pip. EURUSD price on their platform would look something like this 1.22251 A move to 1.22266 takes place when price moves 1.5 pips.
Once you place the trades, most broker platform would show profit and loss in both Pips and dollars. Look at the attached screenshot to get better understanding.
You have given nice shortcut of understanding the meaning of forex pip. Thank you for your posting.