pips・point・tick. How to read FX price movement units without confusing them

“Even though I entered 30 as the stop-loss width, it wasn’t the width I expected.” This can happen when you start using MT5.

One of the causes is confusing similar terms: pips, points, and ticks. This time, I’ll summarize the meanings of each and steps to verify them yourself.

pips: a generally used unit of price movement

Pips are the general unit of price movement in forex. The size of 1 pip differs by currency pair.

• Currency pairs with the yen involved, such as USD/JPY: 1 pips = 0.01 yen
• Currency pairs without the yen, such as EUR/USD: 1 pips = 0.0001

point: the minimum price unit in MT5

In MT5, a point is the smallest decimal place unit displayed for that instrument.

As a hypothetical example, if USD/JPY is displayed with 3 decimal places (e.g., 150.123), then 1 point = 0.001 yen. In that case, 1 pips (0.01 yen) equals 10 points. If EUR/USD has 5 decimal places (1.08123), then 1 pips = 10 points.

In other words, for accounts with 3- or 5-decimal displays, it’s clearer to remember that “points are one-tenth of pips.”

tick: when the price moves once

A tick means the price updates once. The “tick size” refers to the smallest price movement, which in many FX instruments is the same as a point, but it can vary by instrument.

Also, “tick value” indicates the profit or loss amount when one tick moves.

What happens if you confuse them

In EA parameters and MT5 order screens, there are fields to enter as “points” rather than “pips.” For example, when you input a stop loss as “30,”

• if treated as points: 30 points = 3 pips (for USD/JPY, 0.03 yen)
• if treated as pips: 30 pips (for USD/JPY, 0.30 yen)

this creates a tenfold difference. Always check the unit in the input field.

Steps to verify with instrument specifications

1. Open Market Watch (Ctrl+M)
2. Right-click the instrument you want to verify and choose “Specification”
3. Check the decimal places (Digits), tick size, tick value, contracts per lot, and other specifications

Notes

• For CFDs like Gold or stock indices, the definition of “1 pips” differs by instrument. Check the numerical unit in the instrument specifications or from your broker’s documentation
• Displayed digits vary by broker and account type

Summary

Pips are the general term for price movement, points are MT5’s minimum unit, and ticks represent a single price update. Developing the habit of checking the unit in input fields helps prevent unintended settings mistakes.