What are pips in forex market?

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As we know the forex market is the biggest market in the world and it has various currencies.

So it is impossible to learn every small value of every currency.

Like we Indians say "paisa" after the digit of decimal and Americans say "cents". But how can we know every small value of every currency?

Do we need to learn every small value of every currency?

the answer is "No".

This is a big problem and that is why pips had been invented.

Pip is the smallest value of every currency, pip defines the changement of every kind of currency pair.

I make you understand with some examples:-

Let's assume I meet a Japanese and I have to explain to him that the changement of currency pair USD/INR.
USD/INR = 73.64
and change
USD/INR = 73.84
So, how can I explain to him the changement of USD/INR, I simply say that the changement is around 20 pips.

Let us take another example:-

Let's say USD/JPY is 103.55 and it moves to 103.75 then we can say USD/JPY moved 20 pips.

So we can explain and say our profit and loss and movement of currency pairs in pips. everyone knows about pips. we do not need to learn every small value of every currency.

So this is for today.

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