pips

I remember when I first started trading and kept hearing people talk about “pips”… honestly, I was confused.
I used to just look at profits in dollars and ignore pips completely, until I realized I was missing something important. Once I understood this, it actually changed how I look at trades.
Let me break it down the way I wish someone explained it to me 👇
1. What is a Pip?
A pip simply means the smallest price movement in a trading pair.
At first, this sounded too technical to me, but it’s actually simple.
👉 In most markets:1 pip = 0.0001
For example:
If BTC/USDT moves from 30,000.0000 → 30,000.0001
That’s a 1 pip movement.
2. Why Pips Started Making Sense to Me
Before, I would say things like “I made $5”,  but that didn’t really help me improve.
When I started paying attention to pips, I began to understand:
How far the market actually movedWhether my entries were good or lateHow consistent my trades were
Now I see why traders focus on pips instead of just money.
3. How I Learned to Calculate Pips
At first, I thought it was complicated… but it’s not.
👉 Simple formula:
Pips = (Exit Price – Entry Price) ÷ Pip Value
Example I used while learning:
Entry: 30,000.0000
Exit: 30,010.0000
The difference is 10
At first, I got confused here too 😅
Because depending on the decimal format, that can be a huge number of pips.
👉 That’s when I learned:
Always check how your platform calculates it.
4. One Thing That Confused Me (Different Markets)
When I moved between forex and crypto, I noticed things weren’t always the same.
Forex → uses a standard pip system (0.0001)
Crypto → it actually varies depending on the coin and platform
Some platforms don’t even call it “pips” — they use “points”
This confused me at first, but now I always double-check before trading.
5. Mistake I Made as a Beginner
One big mistake I made was thinking:
👉 “More price movement = more profit” That’s not always true.
Your profit depends on:
How big your trade isWhether you’re using leverage
So two people can catch the same move… and earn completely different amounts.
6. What Helped Me Improve
I stopped focusing only on money and started focusing on pip consistency.
Even small, consistent pip gains started to build my confidence and discipline.
And honestly, that’s when I began to feel like I actually understood trading.
Final Thought:
For me, pips stopped being just a “term” and became something I use to measure how good my trades are.
Once you understand pips, you stop trading blindly… and start trading with more clarity.
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