Forex Pips, Pipettes and Lot Sizes Explained
Calculate a price move using the pair’s convention.
Technical terms explained
Pip
A standard unit for measuring a currency-pair move: 0.0001 for our non-yen pairs and 0.01 for USD/JPY.
Pipette
One tenth of a pip. It adds one decimal place to a standard pip quote.
Lot
A way of expressing position quantity. In our calculator, one standard Forex lot is 100,000 base-currency units.
For the non-yen pairs in this course, a standard pip is 0.0001. For USD/JPY it is 0.01. A pipette is one tenth of a pip. Position quantity is measured in units of the base currency. A conventional standard lot is 100,000 base units, but platform minimums and contract definitions vary.
Our operational rule
Price movement divided by the pip size gives the number of pips.
Worked example
EUR/USD 1.0800 to 1.0815 is 15 pips. USD/JPY 148.20 to 148.35 is also 15 pips.
Counterexample
The fifth EUR/USD decimal is not a whole standard pip.
Watch for this mistake
Using a four-decimal pip rule for the yen.
Charts are synthetic. These classification rules are not evidence of profitability.
Source and conventions
OANDA · FX mechanics reference
Broker documentation supports standard quote/position mechanics. Contract terms and execution conventions can differ. No broker endorsement.
Read the source