Pip is an acronym for ‘percentage in point’ and is the smallest price increment in Forex trading. Most currency pairs are quoted to four decimal places, except the Japanese Yen pairs. The fourth spot after the decimal place (100th of a cent) is generally what traders look at in order to count pips. One point movement in that fourth decimal place equals one pip. For example, if the AUD/USD was trading at 1.0500 and the price moved to 1.0501, then this represents a one pip movement.