Forex pips are the term placed on a movement in price. If the currency pair moves up one – this movement of one is termed a ‘pip’. It is possible to trade a number of currency pairs and Forex pips are the most effective way to describe the movement of price. If the trader were trading British Pound, we could say that the price had move up one pence.

However, as the Forex market is a global market trading many different currencies from different countries, the pip value has become the universal terminology for the movement in price.