What is a Pip?

A pip (percentage in point) is the smallest standardized movement in a currency pair:

• EUR/USD: 1 pip = 0.0001
• USD/JPY: 1 pip = 0.01

If EUR/USD moves from 1.1000 → 1.1010, that’s a 10-pip move.

What is a Lot?

• Standard lot = 100,000 units (≈ $10 per pip on EUR/USD).
• Mini lot = 10,000 units (≈ $1 per pip).
• Micro lot = 1,000 units (≈ $0.10 per pip).

Choosing the right lot size is critical to match risk per trade with account size. Learn how in Forex Signal Risk Management.

How Leverage Works

Leverage lets you control more with less capital. Example:

Learning Forex Signal Market(Opens in a new browser tab)

• Balance = $1,000
• Leverage = 1:100
• Trade size = $100,000 position (1 lot)

This magnifies both gains and losses. With 10-pip move, profit/loss = $100 (10% of account). Proper risk rules are essential.

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Risk Management Tips

• Keep risk per trade at 0.5%–1% of balance.
• Use micro/mini lots to align with account size.
• Avoid overleveraging — many accounts fail due to misuse of leverage.
• Gold Signals vs Forex Signals – Which Is More Profitable?(Opens in a new browser tab)