Fractional Pips and Price Precision

[FXS Prop Desk]

Most brokers quote major pairs with five decimal places (three for JPY pairs). The extra digit is a fractional pip, also called a pipette or point.

What it means:

• EURUSD at 1.10235: the pip is the fourth decimal (3), the fractional pip the fifth (5).
• 1 pip = 10 points in MT4/MT5.
• A 20-point stop is 2 pips, not 20.

Common confusions:

• EA settings in points vs pips — a stop of "50" may mean 5 pips.
• Spread indicators showing points instead of pips.
• Different conventions for gold, indices and crypto.

Writing all risk calculations in one unit, and noting which one, prevents expensive mistakes.

For gold, indices and crypto, a "pip" has no universal definition. Checking the tick size and tick value in the symbol specification is the only reliable way to calculate risk on these instruments.

Do you work in pips or points, and have you ever mixed them up?