Direct answer
To count pips in forex, take the absolute price change between two quotes, then divide by the pair’s pip size (the standard decimal step used for that currency pair). The most common pip size is 0.0001, while many JPY pairs use 0.01. If your result is fractional, interpret how your market or platform defines “1 pip” for that instrument.
Explanation (pips versus points)
A pip is a unit that expresses the size of a currency price move. In many forex quotes, price is shown with extra digits, but the pip represents a fixed decimal increment for the instrument.
A closely related term is points (sometimes called pipettes): a point can be the smallest quoted increment (for example, 0.00001 on a 5-decimal quote). A pip may be larger than a point.
What you need
- Start price and end price for the same instrument (same direction doesn’t matter for the count; use absolute change).
- The pip size for that pair as used by your platform (commonly 0.0001, or 0.01 for many JPY pairs).
The counting method
- Pip count = |end price − start price| ÷ pip size
Example logic (generic numbers):
- If a non-JPY pair moves from 1.2345 to 1.2355, the change is 0.0010.
- With a common pip size of 0.0001, the pip count is 0.0010 ÷ 0.0001 = 10 pips.
Example or checks (to avoid common mistakes)
1) 4-digit vs 5-digit quoting
If your screen shows 5 decimals (example: 1.23456), the smallest quoted step may be 0.00001, but the pip size is often still treated as 0.0001 for “pip” calculations. This means:
- 0.00001 is a point (or pipette-like increment)
- 0.0001 is 1 pip
So you may see your platform’s “point” movement more granular than pips.
2) JPY pairs
For many JPY pairs, the pip size is commonly 0.01 (because prices are quoted with fewer decimals for the JPY leg). That changes the division step:
- Pip count = |end − start| ÷ 0.01
If you accidentally use 0.0001 on a JPY pair, pip counts will be off by about a factor of 100.
3) Fractional results
If dividing gives a number like 3.7 pips, that usually means either:
- your inputs are not aligned to the platform’s pip step, or
- the instrument uses a specific pip definition different from the common one. In that case, verify the pip size or the instrument’s specification on your trading platform.
Limitations and what can’t be assumed
- Pip definitions can differ by instrument and platform (especially for unusual contract specifications), so you should rely on the pip size that matches your quoted instrument.
- This explanation covers general mechanics; it does not assume any particular broker, account type, or contract size.
- Pip counting tells you the size of the price move, not the monetary outcome. Converting pips to profit/loss requires additional contract details not covered here.