Pip
Basics
What it means
The smallest price move in forex, usually the fourth decimal place (0.0001) for most currency pairs. It is how forex traders count profit and loss.
Example
If EUR/USD moves from 1.1050 to 1.1055, it rose 5 pips. On a standard 1-lot trade, 1 pip is worth $10, so 5 pips equals $50.
Mistake beginners make
Beginners confuse pips with dollars and place trades far too large. A "small" 20-pip move on a 5-lot position is a $1,000 swing, not $20.