A pip is to a Forex trader what a penny is to stock traders. It's the main point of price movement tracked by traders in discussions of price movement and calculations of trade sizes for risk management. For the majority of currency pairs, one pip is always 1/100th or two additional decimal places, of the lowest physical denomination of the quote currency (the currency on the right side). Since most currencies have an equivalent to a cent or penny (ie. two decimal points is the lowest denomination in bank accounts, with one cent/penny being .01 of a dollar), the pip value would be one hundredth of 0.01 which is 0.0001