What is a pip in forex trade

A pip is the smallest movement an exchange rate changes by. For example, if an exchange rate moves from 1.1750 to 1.1751, that is a 1 pip movement. Why do I say it is a 1 pip move? It's because when you subtract the two rates (1.1751 - 1.1750) you get 0.0001 so just ignore the zeros and call it 1 pip.

forex trading is about speculating/predicting by how much the exchange rate of a currency will change and a pip is used as a means of measurement to calculate the change.

if the exchange rate of the euro against the us dollar (aka EUR/USD) moves from 1.1750 to 1.1751 we can say it has moved by 1 pip. The simple math is (1.1750 - 1.1751) = 0.0001 or 1 pip.

Key considerations when calculating pips for currency pairs are you should keep in mind that exchange rates could be quoted to 4 decimal places (example 1.1750) but some brokers quote them to 5 decimal places (example 1.17500).

For a 5 decimal exchange rate quotation, if EUR/USD rate changed from 1.17501 to 1.17509 then it would have moved 0.8 pips. The math is (1.17509 - 1.17501) = 0.00008 or 0.8 pips