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Basics · Forex Glossary

Pipette — Definition & Meaning in Forex Trading

A clear, practical definition of pipette written for EU retail forex traders.

Quick Answer

Pipette: A fractional pip, equal to one-tenth of a pip. It is the fifth decimal place for most currency pairs (0.00001) or the third decimal for JPY pairs (0.001). Also called a point.

What does Pipette mean?

Pipette is a basics concept every forex trader should understand. A fractional pip, equal to one-tenth of a pip. It is the fifth decimal place for most currency pairs (0.00001) or the third decimal for JPY pairs (0.001). Also called a point. Traders encounter pipette throughout day-to-day decision-making, and a solid grasp of the idea helps avoid costly mistakes — especially for EU retail traders operating under ESMA rules where leverage caps, negative balance protection, and investor compensation schemes all intersect with practical trading concepts like this one.

How is Pipette used?

In practice, Pipette is one of the first things a new forex trader encounters. You will see pipette referenced in account statements, order tickets, platform documentation, and broker marketing. Internalising the idea early helps avoid confusion later when more advanced concepts build on this foundation.

Example

For example, a trader opening a 0.1 lot (10,000-unit) EUR/USD position at 1.0850 who later closes at 1.0875 would reference pipette as part of the round-trip trade. The specifics depend on your broker and account type, but the core idea of pipette remains consistent across EU-regulated venues.

Related Terms

Other basics concepts worth knowing.

Ask

The price at which a seller is willing to sell a currency pair. Also known as the offer price. When you open a buy (long) position, you enter at the ask price.

Base Currency

The first currency listed in a currency pair. In EUR/USD, EUR is the base currency. It represents the currency you are buying or selling.

Bear Market

A market condition where prices are falling or expected to fall. A bearish trader believes prices will decline and may take short positions.

Bid

The price at which a buyer is willing to purchase a currency pair. When you open a sell (short) position, you enter at the bid price. The bid is always lower than the ask.

Broker

A financial intermediary that provides traders with access to the forex market. In the EU, brokers must be regulated by authorities such as CySEC, BaFin, or the FCA.

Bull Market

A market condition where prices are rising or expected to rise. A bullish trader believes prices will increase and may take long positions.

Learn More

Deeper reading in our Learning Center.

Frequently Asked Questions

What does Pipette mean in forex trading?
A fractional pip, equal to one-tenth of a pip. It is the fifth decimal place for most currency pairs (0.00001) or the third decimal for JPY pairs (0.001). Also called a point.
How is Pipette used by traders?
In practice, Pipette is one of the first things a new forex trader encounters. You will see pipette referenced in account statements, order tickets, platform documentation, and broker marketing. Internalising the idea early helps avoid confusion later when more advanced concepts build on this foundation.
Why does Pipette matter for EU retail traders?
Understanding pipette helps EU retail traders make informed decisions under ESMA rules. Every regulated broker in Europe publishes Key Information Documents and platform documentation that reference concepts like pipette, so knowing the terminology is essential before funding a live account.
Where can I learn more about Pipette?
Our Learning Center and Guides section cover basics concepts in depth. You can also explore related terms in the same category through our full forex glossary.

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