PIP

Pip is the another basic term in Forex trading. It stands for Percentage In Point and is essentially  the smallest change in the exchange rate. For example, if the exchange rate of the U.S dollar against the Swiss frank USD/CHF is 1.2212 and the price rises to 1.2213, it means that the exchange rate has changed by one PIP, i.e 0.0001. The result of a deal, i.e profit or loss, is determined by the number of pips the price has passed since you have had your position opened. Together, the absolute result of your trade depends on the amount of money involved to open a position.