What is a pip?
A pip is the smallest common price step in a currency pair — 0.0001 for most pairs (0.01 for yen pairs). If EUR/USD moves from 1.1000 to 1.1001, it moved one pip.
Pips exist because currency prices are quoted to four (or two) decimal places, and traders needed a standard unit for talking about moves: "EUR/USD is up 30 pips today" is instantly meaningful, where "up 0.0030" is not.
What a pip is worth in money depends on your position size: pip value = units × 0.0001. Trade 10,000 units (a mini lot) of EUR/USD and each pip is $1; trade 100,000 units (a standard lot) and each pip is $10. This is why the same 20-pip move can be pocket change or a serious gain — position size, not the move itself, sets the stakes.
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Educational content, not financial advice. Poshkan is a paper-trading simulator — all money, trades, and returns are 100% virtual.